1 



Class 
Book 




COPYRIGHT DEPOSIT 



T H E 

STOR Y OF OIL 




a 



THE 
STORY OF OIL 



BY 
WALTER SHELDON TOWER, Ph.D. 

$0 

ASSISTANT PROFESSOR OF GEOGRAPHY 

UNIVERSITY OF PENNSYLVANIA 




ILLUSTRATED 



NEW YORK 

D. APPLETON AND COMPANY 

1909 



\ 



A 



COPYRIGHT, 1909, RT 

D. APPLETON AND COMPANY 



Publish, (] June, 1909 



LI3RARY of CONGRESS 
Two Codics deceived 
JUN 11 IbUa 

CLA0 ^ *Xt ,. 

CQf' v 



TO 

L. W. T. 

WHOSE ACTIVE INTEREST AND FRIENDLY 

CRITICISMS HAVE AIDED MATERIALLY 

IN THE PREPARATION OF 

THIS VOLUME 



PREFACE 



Recent years have been marked by prolific crops 
of " studies in oil," but dealing mainly with some 
special phase of the oil business, frequently with 

disputed points of an ethical or a legal nature. 
Few, indeed, are the volumes giving in convenient 
form an account from which the reader may sur- 
vey the entire industry and judge its importance 
for himself. It is hoped, therefore, that this 
" story of oil," told in nontechnical terms, may 
serve a double purpose: first, to portray, without 
prejudice or passion, the enormous developments 
in the petroleum industry during the last fifty 
years; and second, to point out the important part 
which petroleum and its products play in every- 
day life. Few industries, even in this age of huge 
enterprises, can rival the petroleum industry in its 
rapid strides of progress ; none can surpass it in 
the magnitude and range of its operations; no 
other has been so completely American in its de- 
velopment. For this reason most of the volume 

vii 



PREFACE 



deals with the evolution of the industry in the 
United States. 

Much more might have been made of the spec- 
tacular side of the industry, but that is, on the 
whole, the aspect which has been most exploited, 
and its incorporation here would have been al the 
expense of other less familiar aspects. Little has 
been said here about the moral and legal aspects 
of Standard Oil activities. It', on the contrary, 
much more than the usual amount of credit is 
given to that company, it is merely a result of 
trying to do justice where but one side of the qu< 
tion is ordinarily considered. 

In the preparation of the volume valuable ma- 
terial lias been drawn from many sources, espe- 
cially from the publications of the United States 
Geological Survey and other Federal Bureaus, as 
well as from various periodicals, particularly from 
the Petroleum Age, the Mineral Industry, and the 
Scientific American; indebtedness to them is here- 
by gratefully acknowledged. 

W. S. T. 

Philadelphia. May 1. 1909. 



CONTENTS 



CHAPTER 

I. — The Nature and Occurrence of Petroleum 

II. — The Ancient History of Petroleum . 

III. — Paving the Way fur Drake's Well . 

IV. — Boom Times and the Pennsylvania Oil 
Bubble 

V. — The Production of Petroleum 

VI. — The Evolution of Bulk Carriers 

VII. — The Processes of Refining Crude Petro- 
leum 

VIII. — Petroleum Products and Their Uses 

IX. — The Remarkable Growth of the Oil In- 
dustry in the United States 

X. — The Greatest Corporation in the World 

XI. — Baku — Our Only Rival .... 

XII. — The Struggle for the World's Trade 

XIII. — The Oil Fields of To-morrow 



1 
20 
33 

47 
62 

82 

107 
132 

157 

175 
204 

223 
244 



LIST OF ILLUSTRATIONS 



PAGE 

A Familiar Scene in the Oil Fields: a Well and Tank on 

Fire ....... Frontispiece 

Surface Indications: a Lake of Oil, Texas . . . 11 

San Jacinto Gusher 18 

An Open Ditch Carrying Oil to an Earthen Reservoir . 74 

Shooting an Oil Well 78 

Storage Tank for Crude Oil 80 

Tank Cars 86 

A Main Pipe Line 90 

A Pumping Station 94 

A Tank Steamer for Bulk Oil and a Lighter for Wax or 

( )il in Barrels 99 

Loading a Bulk Steamer 101 

Burros Loaded with Case Oil on the Main Trail to Fez . 103 
Native Boat Carrying Case Oil up the Hoogly River, 

India 10.3 

Crude Stills 110 

The Stiilman 113 

Agitators 120 

Settling Tanks for the Removal of Water and Other 

Impurities 123 

The Lamp Test 127 

The Old and the New Lamps in China . . . .136 

A Petroleum Buoy . . 138 

Oil Burner in Ordinary Range 140 

xi 



LIST OF ILLUSTRATIONS 

PACK 

Fuel Oil Engine 14-> 

Petroleum Motor Coach on an English Railway 147 

Submarine Torpedo Boat with its Marine Gasoline 

Engine 149 

"Motor" Plow Using Gasoline Engine . 
Moving Oil Tank to a New Field in Pennsylvania lf>0 

A Standard Oil Tank Wagon in India 177 

A Standard Oil Plant in the Far East .197 

A Modern Tanker: the Chief Factor in the Struggle l'«>r 

the World's Trade 

Tank Cart, Osaka 230 

Crossing the Desert with American Case Oil 

Selling American "Bulk Oil" on the Plains of India 

Arecibo, Porto Rico. Burros Loaded with Case < >il foi 
the Interior 

Case ( >il by Caravan, Arabia 

Into the Sahara Desert with American Kerosene 



THE STORY OF OIL 



CHAPTER I 

THE NATURE AND OCCURRENCE OF PETROLEUM 

Fifty years ago more than half the world lived 
in darkness for want of a suitable light. Coal gas 
for illuminating purposes had come into more or 
less general use in the cities and some of the larger 
towns, and burning oils for lamps had been suc- 
cessfully manufactured from coal and shale rocks 
in several European countries, as well as in the 
United States. But the great mass of the eourjtry 
folk of the world were still restricted to the use 
of dim candles, or vile-smelling, spluttering lamps 
which burned animal or vegetable oils. Hordes of 
people in India, China, and Russia were trying 
pitifully to make light with tallow fats in an open 
cup, and rude wicks fashioned from plant fiber. 
Little wonder it is that in the days of our grand- 
fathers " early to bed " was the rule, for there was 
no pleasure to be found in spending an evening 
with only the fitful flickering of a candle to light 
the dreary hours. 

Now all is changed. Night is turned into day 
by the powerful gas and electric lamps of the 
2 1 



\ 



THE STORY OF OIL 

great city, where the stream of life never c« 
throughout the twenty-four hours. Great, ind 
is the service which these lights perform for the 
complex life of the modern metropolis. Bui great- 
er still is the service which has heen done by the 
humble kerosene lamp in the quiet homes of the 
plain people, who bear the brunt of the world's 
work. It has carried the light of civilization into 
every corner of the earth. It has literally made 
life longer for the millions, by turning hours of 
darkness into hours of profitable pleasure and en- 
joyment. Common as it is, the ordinary kerosene 
lamp is one of the greatest inventions of the world 

in its service and benefits to mankind. Yet kero- 
sene is only one of a hundred necessities of every- 
day life which come from the world-wide deposits 
of petroleum. 

If a hundred people were asked to name the 
most valuable of nil the riches taken from the 
earth, probably half of them would promptly name 
one of the precious metals or gems, such Bfl gold 
or diamonds, simply because a given small amount 
costs many dollars. The more practical minds of 
the other half would likely place iron first, and 
rightly so, perhaps, because it occupies such a vital 
position in relation to modern industry. Few, in- 
deed, would be the answers giving petroleum .'in 
important place; yet, iron alone excepted, no other 
mineral product can rival petroleum in real value 
to all the peoples of the earth, without regard to 
class or condition. Using some of its products 

2 



THE NATURE OF PETROLEUM 

constantly in every-day affairs, year in and year 
out, hardly one person in a hundred knows whence 
or how the product comes, or what petroleum is. 
Kerosene, gasoline, benzine, naphtha, machine oil, 
paraffin wax — of course, everyone knows what 
they are. Absurd to ask such a question ! Their 
relation to petroleum ? That is not so familiar. 

This general lack of familiarity with crude pe- 
troleum may be the real reason why it is known 
by so many different names. Mineral oil, rock oil, 
stone oil, coal oil, and naphtha are some of the 
more common terms used for this one and the 
same substance. The first three of these names 
can be readily accounted for from the fact that 
petroleum is a natural oily product occurring in 
the crust of the earth ; in fact, the word petroleum 
itself is derived from the Greek words meaning 
rock oil. 

But the name coal oil, very commonly used in 
some places, is entirely wrong, since petroleum has 
no connection with coal, either in origin or any 
other way. The use of this term, however, arose 
through a perfectly natural combination of cir- 
cumstances. Long before petroleum w T as generally 
known, oil was observed trickling down from seams 
of coal in the Shropshire mines, England. The 
miners, of course, supposed that the oil was de- 
rived from the coal, instead of coming from the 
rocks above, as was really the case, and so called 
it coal oil. Later, when the manufacture of oils 
from coal by distillation was well established, a 

3 



THE STORY OF OIL 

striking resemblance was noticed between petro- 
leum and the oils produced artificially. This sim- 
ilarity still further advanced the belief that petro- 
leum and coal were of the same origin, and that 
the former was really a coal oil. Finally, when 
the first large deposits of petroleum in this country 
were found in Pennsylvania, Ohio, and West Vir- 
ginia, the region was already commonly associated 
with the idea of important coal deposits. It was 
soon demonstrated, both here and in other coun- 
tries, that the rocks including the coal beds were 
entirely distinct from the rocks in which tin 
was found, and that petroleum was not in any 
sense a " coal oil." By that time, however, the 
name was so firmly rooted in popular usage that 
no amount of argument has been able to dis- 
place it. 

Petroleum belongs to the so-called bitumen fam- 
ily, which is made up of compounds of carbon and 
hydrogen, occurring either as gases, Quids, or sol- 
ids, and all the result of much the same pr( 
of formation. Natural gas is the only important 
gaseous member of this group. Petroleum is. of 
course, the most important of the fluid bitumens. 
but the viscous earth tar, mineral tar, or maltha, 
as it is variously called, is also a valuable product 
for certain uses. A clear, waterlike, liquid form, 
passing under such names as rock oil and naphtha. 
is found occasionally in small quantities, the ordi- 
nary petroleum being always more or less colored. 
Among the solid bitumens, asphalt is at once the 

4 



THE NATURE OF PETROLEUM 

most familiar and most valuable, while the mineral 
pitch and mineral wax, or ozocerite, are of fairly 
frequent occurrence. 

The fluid petroleum may be regarded as the 
pivot in the group, since, under varying condi- 
tions, it will give practically every one of the 
different forms named. Natural gas in varying 
amounts is always found with petroleum, and is 
undoubtedly a product of its formation in under- 
ground processes. The relation of petroleum to 
the semisolid and solid varieties, on the other hand, 
depends largely on the presence of air. When 
petroleum is exposed to the atmosphere, evapora- 
tion and combination with oxygen gradually pro- 
duce a concentration of the solid substances, with 
some chemical changes, resulting in the formation 
of tar, pitch, wax, or asphalt, as the case may be. 
Thus, many surface deposits of these solid bitu- 
mens which occur in different parts of the world 
are regarded as the result of slow exudation of 
petroleum from near-by subterranean accumula- 
tions. 

Petroleum, the most abundant and also most 
valuable of the bitumens, varies greatly in char- 
acter, not only from one country to another, but 
also in deposits relatively close together. It is al- 
ways an oily liquid, sometimes thin and at others 
thick and viscous. The color ranges from water 
white, in a few rare deposits, through straw color, 
amber, and yellow, to a dirty brown or almost 
black, the darker colors being the more common. 

5 



THE STORY OF OIL 

The odor is occasionally not especially unpleasant, 
but more often it is highly offensive, decidedly 
penetrating and persistent, and, in many respects, 
the odor has been the worst obstacle to overcome 
in introducing petroleum products. The pioneer 
oil business, in New York City, for example, orig- 
inally established at 184 Water Street, in 1857, was 
soon forced to move because the neighboring mer- 
chants complained so bitterly about the intoler- 
able odor. To anyone who has ever encountered 
any of the so-called " stinking oils," such a condi- 
tion of affairs is not surprising. 

The most important physical character of petro- 
leum, however, is its volatility, or its habit of pass- 
ing partly into a vapor or gas when heated or 
when exposed to the air. It is this property which 
causes petroleum to become gradually denser and 
denser until it reaches the viscous or solid slate 
after continued exposure. On the volatility de- 
pends the whole success of refining, in which the 
crude petroleum is broken up or separated into 
the well-known products. Refining is the real key 
to the modern importance of petroleum, Tor with- 
out such treatment the ordinary crude oil has no 
great commercial value except as fuel. This same 
property also makes petroleum a dangerous com- 
pound, since the gases derived from the crude oil 
are very inflammable even by themselves, and 
when mixed with air form an extremely explosive 
combination. It is this character which makes it 
necessary to store oil in tight vessels to prevent 

6 



THE NATURE OF PETROLEUM 

loss by evaporation, while, at the same time, great 
precaution must be taken in guarding against fire 
near the wells and storage tanks. 

Whatever their outward appearances, petrole- 
ums are always compounds of carbon and hydro- 
gen, often with minor impurities giving an individ- 
ual character to some particular deposit. The 
amount of carbon varies, as a rule, between 80 and 
90 per cent, while the hydrogen makes up only 
about 10 to 15 per cent of the total. The most com- 
mon impurities are sulphur and nitrogen, while 
compounds of sulphur with either carbon or hydro- 
gen, as well as oxygen, arsenic, and phosphorous 
are occasionally found. Fortunately none of these 
impurities are ever present in very large amounts 
—sulphur, the most common, rarely exceeding 3 
per cent; yet even this small amount of sulphur, 
for example, seriously impairs the value of the 
crude oil, by making necessary rather expensive 
purifying processes. 

On the basis of chemical composition and char- 
acter, oil men speak of petroleum as paraffin or 
asphalt oil, from the nature of the solids obtained 
in refining, or as light or heavy oil, the relative 
weights being expressed in degrees of the so-called 
Baume hydrometer scale. Thus, a heavy oil would 
be described as 20° Baume, or simply 20" B., while 
a light oil would range around 60° B.. or higher. 
On the same scale water, the standard, ranks as 
10° B.. so that the oils standing high on the Baume 
scale are very much lighter than water, while the 

~ 7 



THE STORY OF OIL 

heavier oils in some cases quite closely approach 
the density of water. As a general rule the lighter 
oils belong to the paraffin class and are more val- 
uable, since they yield a larger proportion and a 
better quality of the higher-priced products in dis- 
tillation. For special purposes, such as for fuel, 
however, or for the manufacture of lubricating 
oils, petroleum of lower or intermediate densities 
may be superior. 

Petroleum is found to a greater or less degree in 
almost every country of the world; in fact, if the 
gaseous and solid forms of bitumen arc consid- 
ered as indications of the presence of petroleum, 
it must immediately be pronounced one of the most 
widely distributed of all natural substances. It 
also occurs in almost all ages of rocks, though the 
deposits which have become commercially impor- 
tant so far have been confined mainly to unaltered 
rock formations of special periods. The popular 
impression that petroleum is an unusual substance 
in nature is entirely without foundation ; it is only 
the valuable accumulations of oil which are more 
or less scattered. 

All the world over, attention has first, been at- 
tracted to the existence of petroleum by tin 
called " surface indications/' such as the appear- 
ance of oil bubbles in wells and springs, or a scum 
of oil floating on the surface of ponds and streams. 
In the face of almost total ignorance, both as to 
the true nature of the oil and general underground 
conditions, it was perhaps only natural to believe 

8 



THE NATURE OF PETROLEUM 

that the petroleum came from " subterranean 
reservoirs," " underground lakes/' or " flowing 
streams of oil." This early belief was materially 
strengthened by the drilling of unproductive wells, 
and by the practical independence of many of the 
Russian wells, despite the fact that they were lo- 
cated relatively close together. It was supposed 
that non-productive wells had failed to penetrate 
an oil-filled cavity in the rock, while the great pro- 
ducers were those which happened to strike unusu- 
ally large cavities or the intersection of two fissures 
or channels. The early accounts of petroleum 
wells are full of rude illustrations of such im- 
aginary underground caverns of fantastic shape, 
with gas above, petroleum in the center, and water 
below. 

Caverns and fissures may exist in the rocks be- 
neath the surface, but the records of hundreds of 
thousands of wells sunk in all parts of the world 
do not show that petroleum deposits are necessa- 
rily associated with them. On the contrary, the 
drills indicate beyond question that the oil comes 
from porous rock formations and not from appre- 
ciable openings in the strata. It comes from the 
multitude of tiny spaces between the grains of the 
rock itself instead of from one big chamber or 
series of connecting chambers. 

The first operators in the petroleum industry in 
this country also argued that the appearance of 
oil on the surface of streams indicated the exist- 
ence of a reservoir near by, and they came to be- 

9 



THE STORY OF OIL 

lieve that the accumulations of petroleum under- 
ground coincided with depressions or valleys on 
the surface. The river flats, moreover, offered bet- 
ter sites for operations than did the steep slopes 
of neighboring hillsides, so that for a time efforts 
to secure oil were confined to the valleys. But the 
spread of operations from one place to another 
soon demonstrated that the oil-producing forma- 
tions were of greater extent than had been im- 
agined. Then the more far-sighted operators, or 
perhaps the more reckless, began to doubl that the 
productive area necessarily underlay the river 
bottoms, and to wonder if the neighboring uplands 
did not also cover the hidden treasure. With this 

class of men, to wonder was to act. Despite the 
derisive name, " wildcat M applied to their ven- 
tures, many sunk wells on the uplands adjoining 
the productive valleys, and proved that the oil 
rocks could be reached. Wildcat operations there- 
by became a regular part of the oil business, serv- 
ing in later years to mark the limits of old, and to 
locate new, oil-producing territory. 

In most cases there is a comparatively large 
area which can be called an kk oil field," the limits 
of which may be quite closely determined from 
a study of the rock formation, and by sinking an 
occasional test well. Within the main field there 
are usually several distinct areas, or " pools/' 
from wdiich the chief production comes, for it is 
very unusual to find oil in paying quantities in 
every part of a field. " Pools " are usually dis- 

10 



THE NATURE OF PETROLEUM 

covered through surface indications or " wildcat- 

ting," though the attitude and character of the 

rocks may be some guide. Individual pools vary 
from a few acres to several hundred square miles, 
while the main field in which they occur may in- 
clude thousands of square miles. The famous 




Surface Indications: a Lake of Oil, Texas. 



Spindle Top pool in Texas covered scarcely 300 
acres, while the great Appalachian field covers 
nearly 50,000 square miles and includes a score of 
important pools. 

The discovery of enormous quantities of petro- 
leum far removed from coal-bearing rocks natu- 

11 



THE STORY OF OIL 

rally led to much speculation concerning its origin, 
since it could no longer be regarded as having a 
common origin with coal. In accordance with the 
idea of occurrence in underground chambers, it 
was supposed by many that the interior of the 
earth contained " an enormous reservoir of Liquid 
petroleum," from which it was injected into the 
fissures above. This explanation was supported by 
the amusing argument thai " petroleum could not 
have come from the clouds.' 1 

Another theory attempted to explain petroleum 
deposits as a result of volcanic action, in spite of 
the fact that many of the most important loealit 
showed no signs of volcanic activity either past or 
present. A third hypothesis sought to include the 
action of the salt in the salt water which is almost 
universally found in association with petroleum. 
Another thought that petroleum was Formed by 
the interior heat of the earth acting on the tur- 
pentine of pine trees, lint of all the curious the- 
ories, propounded at one time or another, the most 
absurd is undoubtedly found in the idea of a Penn- 
sylvania oil man, who believed that American 
petroleum was the urine of whales which had 
found its way from the Arctic region through sub- 
terranean passages. 

This question of the origin of petroleum has 
occupied the attention of many of the most noted 
scientific men of recent generations, bnt even down 
to the present day no one has devised an explana- 
tion acceptable to all. Opinions remain still dia- 

12 



THE NATURE OF PETROLEUM 

metrically opposed, with names carrying much 
weight arrayed on both sides. In general, the con- 
troversy is between the chemists on one hand and 
the geologists on the other, although there are some 
few of each class who must be regarded as deser- 
ters from the ranks. 

The chemists believe that petroleum is of inor- 
ganic origin, or, in brief, that it is the result of 
instantaneous chemical reaction between carbon 
and hydrogen coming in contact under special 
conditions underground. The famous chemist Ber- 
thelot was the first to advance this idea. In his 
estimation an intensely heated metallic kernel in 
the center of the earth, carbonic acid and water 
coming in contact with these metals and with each 
other, were sufficient to produce the compounds 
of carbon and hydrogen found in petroleum. Most 
of the prominent chemists of Europe, among them 
the great Mendeleef, have accepted this theory 
with slight variations, and to justify their belief 
they point to very beautiful laboratory experiments 
in which artificial petroleum has been made. 

On the other hand, a very serious objection to 
the chemical origin is found in the well-known fact 
that petroleum varies greatly both in physical and 
chemical character, whereas it is a fundamental 
principle of chemistry that a given reaction al- 
ways produces the same compounds with the same 
character and the same composition. The adher- 
ents of the chemical theory usually try to explain 
away this objection in an offhand manner by say- 

13 



THE STORY OF OIL 

ing that the variations are the results of differ- 
ences in the strata through which the petroleum 
has passed since its formation. But from evidences 
found in the wells it is known that there lias 
often been very little, if any. movement of oil 
through the rocks, while, even if there had been 
such movement, the rocks do no1 vary enough to 
account entirely for such wide differences as are 
observed within the limits of relatively small 
areas. 

What may be called the geological theory is 
based on the facts observed in the study of the 
different formations where oil lias been found. On 
the basis of these facts, geologists as a body regard 
petroleum as of organic origin, or, in other words, 
as the result of slow decomposition of organic re- 
mains, animal or vegetable, which have been stored 
up in the rocks since the time of their formation. 
But, even among themselves, geologists can not 
come to any unanimous opinion, sonic holding to 
the idea that the organic remains were mainly de- 
rived from plant life— partly water, partly marsh, 
and partly land species — while others maintain 
just as stoutly that it was essentially animal life, 
much the same as is found in the ocean to-day; 
and many arguments are advanced to support the 
statements of both sides. 

In the midst of all these conflicting views, it is 
hard to determine just which ideas are most clearly 
entitled to receive general acceptance 1 . The pres- 
ent tendency, however, is to accept without much 

14 



THE NATURE OF PETROLEUM 

question the geological theory of organic origin as 
being based on actual observation rather than on 
laboratory deductions. At the same time the num- 
ber of advocates of the animal life theory is grow- 
ing much more rapidly than is the number of those 
who hold to the plant life origin. It is not un- 
likely that each is partly right : that while the 
larger proportion of petroleum deposits have been 
derived from animal remains, some particular de- 
posits, as certain light-colored oils of Pennsylva- 
nia, may be of vegetable origin. The variations 
in character and composition of crude petroleum 
are thereby readily accounted for as coming from 
differences in the animal or plant remains, while 
different degrees of heat, varying lengths of time 
in the process, and minor differences in rock mate- 
rial may have aided in determining individual 
characters. 

With very few exceptions, the accumulation of 
important petroleum deposits has been controlled 
by the character and attitude of the strata. In 
fact, the occurrence of commercially valuable de- 
posits depends fully as much on the existence of 
suitable conditions in the rocks as it does on the 
presence of an adequate original source of supply. 
The first requisite for accumulation is the presence 
of a coarse-grained, porous rock to act as a reser- 
voir in which the oil can be stored. The usual 
reservoir rocks are sandstone, whence the common 
term " oil sands," although certain limestones, 
and occasionally a pudding stone or conglomerate, 

15 



THE STORY OF OIL 

serve the same purpose. This reservoir rock must 
be entirely covered by a fine-grained, non porous 
layer, the impervious nature and absence of frac- 
tures in this second layer controlling to a very 
large degree the ability of the reservoir rock to 
retain its store of oil. Fine-grained shales are the 
commonest and most perfect covers for these un- 
derground reservoirs, and where such a combina- 
tion of porous and non porous strata exists in an 
oil-bearing region, the formation of a workable oil 
field usually results. In some cases, as in the 
limestone oils of Ohio, the reservoir rock IS also 
the source of the supply, the oil being stored in the 
same strata where it was formed. In other cases, 

as in most of the Pennsylvania districts, where 
the oil is found in sandstone strata, the souiv- 
the supply is below the reservoir rock, and distinct 

from it. 

A third factor, which has aided in most large 
accumulations of petroleum, is tin 4 existence 
folds in the strata, arches and troughs which have 
resulted from the shrinking and wrinkling of the 
earth's crust. Practically all the great oil fields 
of the world show that the important deposits arc 
found under the roofs of the arches, or anticlines 
as they are called, because the oil is much lighter 
than the salt water occurring in the same strata 
with it, and hence rises to the highest points pos- 
sible under the arching, impervious shale cover. 
This anticlinal theory of occurrence has often 
aided materially in determining the probable limits 

16 



THE NATURE OF PETROLEUM 

of a known field, and in the discovery of new 
fields and pools. 

It may seem incredible that such enormous quan- 
tities of petroleum as have been yielded even by 
single wells can be secured from a rock which ap- 
parently is perfectly solid throughout. This fact 
more than anything else probably has fostered and 
kept alive the popular idea that the oil must come 
from fissures and cavities; for, it is argued, how 
else would there be room for so much oil ! If a piece 
of the reservoir rock is examined under a strong 
magnifying glass, however, millions of tiny spaces 
appear between the different sand grains, and water 
will find its way through thick pieces in a com- 
paratively short time. Such a porous, oil-bearing 
rock may very easily contain one tenth or one 
eighth of its bulk of petroleum, while some " oil 
sands " of the Russian fields have been calcu- 
lated to contain not less than one fifth their bulk 
of petroleum. So innumerable are these pores in 
the rock that removal of the oil goes on readily 
enough, occasionally with enormous discharge for 
a time, without the existence of any definite chan- 
nels to facilitate the process. 

Both the storage of the oil and its discharge 
from the well are aided by the fact that the oil 
usually exists under pressure. The outward mani- 
festation of this pressure appears most strikingly 
in the great flowing wells, sometimes yielding thou- 
sands of barrels of oil daily. It was originally 
supposed that the pressure was due to the weight 
3 17 



THE STORY OF OIL 

of the strata lying above the oil-bearing layers, but 
such an explanation is impossible. Even a com- 




paratively weak rock will not crush under a weight 
of several hundred tons per square foot, or six 

18 






THE NATURE OF PETROLEUM 

to eight times the weight of the overlying rocks, 
at a depth of 1,000 feet. It has also been sug- 
gested that the pressure is due to the " head ? 
of water in the porous strata, as in artesian wells. 
But the facts observed in a multitude of instances 
do not show any parallel to the action of artesian 
wells, since the pressure steadily decreases almost 
from the moment the first discharge begins. 

The most plausible explanation is that the pres- 
sure is due to imprisoned natural gas which is 
almost universally associated with petroleum. This 
theory is supported by the fact that, as the gas 
pressure is relieved by escape to the surface, the 
flowing gradually ceases, and can rarely be induced 
again. The greater the pressure, however, the 
larger the amount of oil which can be stored in 
a given space in the rock and the larger the yield 
when the reservoir is tapped by a well. This ex- 
planation readily accounts for the most phenom- 
enal yields ever secured, without presupposing the 
existence of cavities of any sort. 



CHAPTER II 
TITK ANCIENT HISTORY OP PETROLEUM 

The petroleum industry as it appears to-day is 
distinctly a creation of modern times. Yel so < >K I 
is the actual knowledge of its character and its 
appropriation to man's nerds thai no one can tell 
just where or when petroleum was first recognized 
and put to general use. It mighl almost be said 

that the history of petroleum begins with the his- 
tory of mankind, for references to the members 6t 
the bitumen family are found throughoul the 

records of past and present ages. 

The chances are, however, that petroleum, or 

some closely related member of the bitumens, was 

first put to general use by the ancient civilization 
of western Asia, at least two or three thousand 
years before tin 1 beginning of the Christian era. 
Modern explorations in Assyria, in excavating the 
ruins of ancient cities have revealed fragments of 
brick with an asphaltlike cement still clinging to 
them. Old bitumen and naphtha wells are said to 
have been discovered in many places, while in the 
remains of the famous tower of Ackerouf, near the 
ruins of Bagdad in ancient Chaldea, bitumen ee- 

20 



ANCIENT HISTORY OF PETROLEUM 

merited walls are still visible after the lapse of at 
least thirty-five centuries. A semifluid bitumen, 
probably similar to mineral pitch or naphtha, is 
found to have been used extensively in the con- 
struction of Babylon and Nineveh, as a cement for 
brick and slabs of alabaster. In the magnificent 
palaces and temples of these ancient cities, the 
wonderful mosaic pavements and beautiful in- 
scribed panels were fastened in their places with 
this same material. It was also put to more hum- 
ble uses in rendering water-tight cisterns and silos 
for grain. 

Some of these structures, dating back into al- 
most unknown antiquity, are still standing intact 
among the ancient ruins of western Asia. Most 
of the bitumens were undoubtedly obtained from 
local sources, which are common in many parts of 
Persia, Asia Minor, and surrounding districts, al- 
though some may have been derived from more 
distant localities. Thus, Herodotus, the Greek his- 
torian, says that the bitumen used as mortar in 
building the walls of Babylon was brought from 
the river Is, a tributary of the Euphrates. 

The Egyptians also apparently made use of bitu- 
mens as early as two thousand years before Christ, 
for it is known that embalming of dead bodies was 
a common practice among them at least four thou- 
sand years ago, and many of the mummies since ex- 
humed have been found to have the body cavities 
filled with an asphaltlike material. It is also said 
that petroleum served as a sort of glue in the nian- 

21 



THE STORY OF OIL 

ufacture of the ancient papyrus ting mate- 

rially in preventing the ravages of insects, a valu- 
able property of petroleum which is still utilized 
in various ways. Just where the Egyptians i 
cured their supplies of bitumens is nol clearly i 
corded Petroleum deposits are known at the pres- 
ent time in Egyptian territory, bul about the only 
information concerning the supplies in ancient 
days is afforded by a ftistorian of Caesar's time, one 

Diodorus, who says that inhabitants of the Dead 
Sea region collected the asphall casl up on the 
shores of the sea, and sold it in Egypt for embalm- 

ing purposes. 

In view of the numerous records of bitumens in 
theearly civilization of western Asia and Egypt, il 
may seem strange thai the Old Testamenl Scrip- 
turesdonol mention these apparently famiharsub- 
Btaaces. Itistruethal in Job Mix, 6, is found the 
statement, "the rock poured me ou< rivers ol oil, 
but beyond thai statemenl there are no dired ref- 
erences to oil from the earth. This apparenl dis- 
crepancy between historical and scriptural records, 
however, is explained by the fact thai in tranalat- 
ing the Bible, the word "salt" is said to have been 

used indiscriminately for eon. mm, salt, nitre, and 
bitumen, while words translated "slime in the 
common version, are translated "bitumen m 
others. This other meaning of "slime" maki 
sible quite a different interpretation of those p 
sages which refer to its occurrences or uso. Tims. 
the statement that in building the Tower ol Babel, 

22 



ANCIENT HISTORY OF PETROLEUM 

"slime had they for mortar' ' (Gen. xi, 3), undoubt- 
edly refers to bitumen, which may have come from 
the vale of Siddim, said to be " full of slime pits" 
(Gen. xiv, 10). This latter reference to slime pits 
would also seem to indicate that the substance was 
used commonly enough to make its collection from 
special pits a more or less regular practice ; a con- 
clusion which cannot be drawn so readily from the 
other early accounts of its use. 

The Greeks and Romans, too, were familiar with 
numerous occurrences of natural earth oil and its 
use for various purposes long before the birth of 
Christ, for many references to it are found in the 
works of their historians. In Greek literature 
there appears what is perhaps the first attempt to 
account for the origin of petroleum. Among the 
tales of the Argonauts, Appolonius of Rhodes re- 
counts the fable of Prometheus, chained on the 
Caucasus mountains for having stolen the fire 
of heaven. From the day of his captivity, an 
eagle unceasingly devoured his liver, after which it 
vomited a blackish liquor called naphtha by the 
Greeks. This black liquor was to make Jason in- 
vulnerable in his search for the Golden Fleece. The 
association of localities and ideas suggests that the 
occurrences of oil in the Caucasus district were 
familiar to the Greeks, and that this fable may be 
regarded as their mythical conception of its origin. 

The w r orks of practically all the important Greek 
writers refer to bitumen deposits in various places, 
two of which, at least, are worthy of special men- 

23 



THE STORY OF OIL 

tion. Plutarch records the discovery of petroleum 
on the banks of the Oxus River by a servant of 
Alexander the Great, during one of the campaigns 
made by that famous general. Other mention is 
made of bitumens secured at Epidamnos, Pieria, 
and in the island of Zante. But most interesting 
of all, is the description of what was appar- 
ently a fairly regular industry in collecting petro- 
leum from the pits of Susiana, a southern prov- 
ince ef ancient Persia. This account by Herodotus, 
written about 450 b.c, says that " at Ardericca is 
a well that produces three different substances, for 
asphalt, salt, and oil are drawn Up from it in the 

following manner. It is pumped up by means of 

a swipe (sweep) and. instead of a bucket, half a. 
wine skin is attached to it. Having dipped down 
with the swipe, a man draws it up, and pours 
the contents into a reservoir, and being poured 
from this into another, it assumes these different 
forms: the asphalt and the Bait immediately be- 
come solid, but the oil they collect ; it is black, and 
emits a strong odor." 

The oil described was unquestionably petroleum, 
and this account is entitled to the honor of being 
the first full description of a regular petroleum- 
gathering industry. 

The Roman records likewise contain frequent 
references to bitumens of one form or another, 
both in Roman territory and in other countries. 
Early in the Christian era, the Roman army, fol- 
lowing the practices of the people of the East, is 

24 






ANCIENT HISTORY OF PETROLEUM 

said to have used bituminous cements in the con- 
struction of piers for bridges. But the chief in- 
terest in the Roman accounts centers in the many 
references to the wells near ancient Agrigentum, 
the modern Girgenti, in Sicily. The oil which was 
secured from this locality was known as Sicilian 
oil, and was burned in lamps in the temple of 
Jupiter about the beginning of the Christian era. 
The story of " Sicilian Oil " affords the first re- 
corded instance of the use of petroleum as a source 
of light, and from that time until the present there 
has been more or less constant use of Italian pe- 
troleum for lighting purposes. During the Dark 
Ages following the decline of the Roman Empire, 
the history of petroleum lapses for several cen- 
turies, but toward the end of the period reference 
to its use reappears in the records. For example, 
the oil occurring near Miano was used for light by 
the people of the vicinity, and as early as 1400 a 
concession was secured for the more extensive col- 
lection of oil from wells near that place. The 
celebrated petroleum from Modena was regularly 
worked with wells fifty to sixty feet deep before 
the middle of the seventeenth century, and oil from 
the wells at Amiano was employed in lighting the 
city of Genoa at the beginning of the last century. 
In other European countries, too, there are rec- 
ords of petroleum being known and used for the 
past three or four hundred years. Early in the fif- 
teenth century, the oil from the Tegern region of 
Bavaria w r as used in medicine, under the name of 

25 



THE STORY OF OIL 

St. Quirinus Oil. The ''earth balsam/' or ''moun- 
tain balsam," as petroleum was called in Galicia, 
was known as early as the beginning of the six- 
teenth century at least, and was likewise supposed 
to possess special medicinal value, particularly for 
rheumatism and for diseases of cattle. The oldest 
historical records of this region show that the oil 
was collected in rudely timbered wells or pits, the 
remains of which still exist, and was used as cart 
grease or in the preparation of leather, Illumina- 
ing oil distilled from the crude petroleum is said 
to have been used in Prague as early as 1810, this 

making it the first case on record where a refined 
oil was used for lighting. 

Early in the seventeenth century, the natural <»il 
springs near Gabian, in Prance, were discovered, 
and Tor many years the petroleum was skimmed 
from the surface of the springs to be sold as "G 

bian Oil," a remedy for every known ill. Iii fact, 
this spring became so famous that it attracted the 
people of all Languedoc, ami to accommodate the 

who came to take the "cure," a sort of subter- 
ranean pond, with tunnels, was constructed. Bu1 
a company formed later to produce oil on a hit 
scale never succeeded. 

The inhabitants of the Hanover district, in Ger- 
many, are said to have used petroleum for wagon 
grease and illuminating purposes since time imme- 
morial, obtaining their supplies from deep pits. 
called "Fettlocher," or "grease holes." hut their 
crude methods could not have afforded more than 

26 



ANCIENT HISTORY OF PETROLEUM 

a very scant supply. It was gathered by plunging 
bundles of long reeds into the water. The oil ad- 
hering to these reeds, when the bundle was drawn 
out, could be separated from them by twisting the 
bundles in the same way as one would wring water 
from a wet cloth. 

Although Great Britain contains no important 
petroleum deposits, attention was drawn to the bi- 
tuminous rocks at a very early date, and before the 
end of the seventeenth century a patent had been 
granted for a method of making pitch, tar, and oil 
out of a kind of stone. Oil so made was sold as 
**Betton's British Oil," to cure strains and rheu- 
matism. Thus, almost before the oil regions of 
America had been seen by the white men, petro- 
leum for some purpose or other had been used in 
practically every country of Europe. 

Among the nations of the Far East, also, the 
knowledge of bitumens goes far back into the ages 
of the dim past. The ancient records of China de- 
scribe the use of natural gas for both fuel and light 
centuries before the beginning of the Christian 
era. Japanese history says that the '* burning 
water," as petroleum was called, was first discov- 
ered and used in the Echigo district about 615 a.d. 
But in spite of the fact that the industry has been 
prosecuted almost continuously since then, the 
primitive methods used until recently yielded only 
a small quantity daily. In the islands of the East 
Indies petroleum deposits have only recently been 
developed, but the natives have known of its exist- 

27 



THE STORY OF OIL 

ence and have used it in the preparation of leather 
ever since the advent of Europeans in the region. 
Petroleum deposits in the Indian mainland, espe- 
cially in British Burma, have been worked since 
remote antiquity, bo remote, in fact, that they are 
often regarded as perhaps the oldest petroleum 
wells in the world. Here an important industry 
was developed before the American colonies had 
spread beyond the Alleghanies, and long before 
the beginning of the last century, oil from pits in 
the Irrawady valley was sent to many parts of In- 
dia. Small (piant it ies, passing under tin name 
"Rangoon oil," occasionally even found their way 
to far oft' Europe, along with the resl of the valu- 
able trade from the Orient, 

The one locality, however, which stands out more 
prominently than all others in the ancient history 
of petroleum is the Baku district, on the shores of 

the Caspian Sea— tin* borderland between Europe 

and Asia. Here the distinction of L r re;it antiquity is 

inseparably interwoven with the story of the mys- 
tic rites of the fire worshipers, followers of Zoro- 
aster, in the strange Parsee religion. Here, in the 
sacred region of the everlasting fire, it is believed 
that the imaginative, superstitious Oriental minds 
were first impressed with a phenomenon, to them 
supernaturally mysterious, the work of some unseen 
mighty spirit. Fires proceeding from the sprin 
of natural gas are supposed to have existed for un- 
known ages in the Caucasus isthmus, and burning 
without apparent fuel, it was but an easy step for 

28 



ANCIENT HISTORY OF PETROLEUM 

the perplexed, half-savage people to regard fire, 
and especially this eternal fire, as the emblem of a 
beneficent god. Here, then, in sight of the eternal 
flames, flickering above crannies in the rock, lighted 
no one knows how, man. subdued with awe, came 
first to worship the mystery of fire. Here, for count- 
less generations, hordes of Parsee worshipers came 
from Persia and far away India, from across the 
Caspian and the river Oxus, on pilgrimages to 
Baku, the holy city of fire, to their ancient stone 
temples and shrines, dedicated to the hidden power 
of flames that never ceased. Even until a genera- 
tion ago. the famous temple of Surakhany wel- 
comed its devotees from India, who still came to 
worship at the altars where the fires burned un- 
quenched after thousands of years. To-day pipes 
have been fitted to the crannies in the rocks; the 
gas is used by enterprising natives to warm their 
huts or cook their food, and profane oil derricks 
dot the surface. But in spite of all the dirt and 
ugliness in a modern oil region, the romance of his- 
tory still hovers over the place where man perhaps 
first learned the nature of fire, and bowed himself 
down in its worship. 

How these everlasting fires were lighted origi- 
nally must remain a mystery forever, but long ago 
it was recognized that there was nothing occult or 
mysterious in the apparent burning without fuel. 
Natural petroleum gases not only issued steadily 
from crevices in the rocks, but also, it is said, in- 
flammable vapors were given off from the earth. 

29 






THE STORY OF OIL 

A hollow cane thrust into the ground a few inches 
and touched with a live coal at the top would give 
a steady flame, three or four of them affording 
heat enough to boil water and cook food. Nearly 
two centuries ago, the natives of 1 he region were de- 
scribed as using this method, both for heat and for 
light in their earthen-floored bouses. 

The earliest stories of Baku all refer to these 
burning gas springs, with the strange rites of the 
fire worshipers, but it is not until the time of 
Marco Polo that the use of petroleum itself is di- 
rectly mentioned. Thai famous explorer, visiting 
the Baku region in the latter pari of the thirteenth 
century reported a greal fountain of oil from 
which "a hundred shiploads might be taken at 

one time." He also says thai the oil w;is no1 

to eat but was good to burn, ;ind was used to eure 

diseased camels, the people coming from great dis- 
tances to secure it, because there was no other oil 

in any of the countries round about. Polo's brief 

account thus implies thai the oil trade must have 

been thoroughly established at the time of his visit, 
hence there is every reason to suppose thai it ranks 
along with the Burman fields in antiquity. Polo, 
it is true, is often accused of telling too highly col- 
ored tales about his adventures, but fortunately, 
in this particular case, his statements are sup- 
ported by other accounts in the succeeding cen- 
turies, wherein Baku is described as the source of 
oil winch is "burned throughout all Persia/' 
Baku first came into the hands of Russia when 
30 



ANCIENT HISTORY OF PETROLEUM 

it was annexed from Persia by Peter the Great, 
some two hundred years ago. The Russians were 
then evidently well acquainted with the character 
and value of the petroleum springs, since Peter 
made arrangements for its regular collection and 
transportation to Russian towns by way of the 
Volga River, apparently with the intention of de- 
veloping an important industry. Before anything 
was accomplished in this direction the region was 
restored to Persia, and the modern period of Rus- 
sian development did not begin until the early part 
of the last century. 

The intervening years, however, were not a pe- 
riod of stagnation. About the middle of the eigh- 
teenth century, England sent a representative, one 
John Hanway, to report on the condition of Brit- 
ish trade in the Levant, and among his accounts 
there appears a very complete description of the 
Baku district, with the petroleum industry as it 
existed at that time. According to Hanway, the 
Persians were then securing oil in great abundance 
from the springs, carrying it by means of troughs 
into pits or reservoirs, where it was allowed to set- 
tle. Afterwards, by drawing the oil into a second 
reservoir, it was separated from the water and 
other heavy impurities with which it had issued 
from the springs. In its important details, there- 
fore, this industry was exactly like that described 
at Ardericca, by Herodotus, two thousand years 
before. A regular practice was made of loading 
the oil in bulk in the Persian sailing craft, carry - 

31 



THE STORY OF OIL 

ing it thus to the surrounding districts, where it 
was used for fuel and light. 

The supply was so abundant that every family, 
even to the poorest, could afford to use it. Besides 
the ordinary petroleum, or "black naphtha," 
it was called, there was also a waterlike oil occur 
ring in certain places. This purer oil was put to 
a variety of purposes, chief among them being its 
use as a cordial; as a medicine for both external 
and internal application; and to remove grei 
spots from silk and wool, though the remedy was 
said to be regarded as worse than the disease on 
account of the abominable odor. It was also car- 
ried to India to be used in the manufacture of 
varnishes of "very beautiful and lasting quality." 

This account by Hanway, written a little more 

than a century before the firsl well was drilled in 
the United States, forms one of the most interest- 
ing of all the early records of petroleum, because 
it suggests in (me way or another the whole skele- 
ton of the important industry existing to-day. 
The two chief faets which are especially significant, 
prophetic even, are the practice of shipment in 
bulk, on which the success of the modern industry 
largely depends, and the ability of everyone, down 
to the very poorest, to take advantage of its numer- 
ous uses. More curious still is the fact that the 
Khan of Baku enjoyed a practical monopoly of 
this important Caspian industry over a hundred 
years before the idea of a Standard Oil Company 
was conceived. 

32 









CHAPTER III 

PAVING THE WAY FOR DRAKE *S WELL 

The American petroleum industry, like all the 
other vast developments of this country, is largely 
a thing of the present rather than of the past. It 
finds no such records, in antiquity as have been 
presented through the accounts of ancient authors 
concerning the petroleum of the Old World. But 
it was not long after the first settlements in the 
New World before the hardiest adventurers into 
the endless American forests were bringing back 
tales of the oil springs and the wonderful medicine 
used by the Indians. 

It is often claimed that in this country the use 
of petroleum antedates any of the Indian tribes 
found by the earliest white settler. This claim 
arises from the fact that the oil region of Pennsyl- 
vania was found by the first English settlers to be 
dotted with rudely constructed pits inclosing the 
springs from which petroleum issued. Extreme 
age for the pits was indicated by trees which had 
sprung up on their banks and had attained a size 
said to be possible only as the result "of hundreds 
of years of growth.' ' The pits were apparently 
4 33 



THE STORY OF OIL 

very old and abandoned when the first English 
explorers penetrated this part of the wilderness, 
and it has been said that the Indian legends 
attributed their origin to a highly civilized race 
which had long before become extinct. 

It is still a question whether such a legend actu- 
ally did exist among the Indians, or whether it 
came bodily from the fertile imagination of some 
one of the many individuals who have tried to con 
nect the pits with the so called "mound builders/' 
But in the minds of many who have investigated 
the famous "oil pits' ' story most thoroughly there 
is no longer any question that they were the works 
of early French explorers. 

There is, however, no doubt that the use of pe- 
troleum was known among the Indians before they 

came in contact with either French or English. 
One legend says that just across the Canadian bor- 
der there was a lake 1 with a black surface — always 
black, and blacker by far than the shadows of the 
surrounding forest could have made it. Their curi- 
osity aroused by this strange appearance, the In- 
dians soon discovered that the deep color was 
caused by a greasy, strong smelling liquid form- 
ing a scum over th(» surface. They also observed 
that many animals' of all kinds came to drink the 
water of this Black Lake, a fact which sugge 
the possibility of some special virtue in it. Fol- 
lowing the example of the animals, they found as 
a reward for their curiosity that drinking the 
water was apparently beneficial for certain ail- 

34 






PAVING THE WAY FOR DRAKE'S WELL 

ments. Prom that time on, the legend says, the use 
of the oil became well-nigh universal among the 
Iroquois nations, and the Indian medicine men at- 
tributed to it such magic powers in all inward and 
outward ills that supplies were sought for in the 
places more remote from the now famous Black 
Lake. 

In the southern part of New York State the Sen- 
eca tribe found petroleum in springs from which 
it was gathered in small quantities. Here appar- 
ently the white settlers first became acquainted 
with the Indian use of petroleum, and gave to it 
the name " Seneca oil," by which it was known for 
more than a century. 

Turning from legendary to recorded history, the 
first written mention of petroleum appears in the 
letter of a French missionary, who describes a 
fountain of bitumen which he saw issuing from 
Lake Ontario while he was on a journey through 
New York districts in 1627. During subsequent 
years other Frenchmen reported the existence of 
petroleum in the Iroquois country, and on a map 
of the region, published in 1650, a " fountain of 
bitumen' ' is indicated near the present village of 
Cuba, in New York State— a strong proof that the 
occurrence was a matter of common knowledge. 
For a century or more after that time, however, 
the history of petroleum in this country consisted 
of nothing more than an occasional mention of the 
same regions of oil springs. 

Some time during the latter part of the eigh- 
35 



THE STORY OF OIL 

teenth century the commercial spirit, which was so 
strong among the colonists, prompted sonic ingeni- 
ous spirit to attempt the introduction of "Seneca 
oil" as a medicine among the whites. Even at that 
early date the methods of the modern patent medi- 
cine advertisement were apparently familiar, for 
in 17f)l glowing accounts were published, Betting 
forth the wonderful virtues of this natural remedy. 
The American soldiers, tired and sore from camp- 
ing and marching in the Pennsylvania wildern. 
were pictured as stopping at the springs along Oil 
Creek to rub their weary limbs and joints with tin 4 
oil. All their fatigue disappeared as if by magic, 
while chronic pains and rheumatism were perma- 
nently cured. But, in spite of the amazing cura- 
tive powers ascribed to it by Indian medicine men 
of old and by sharp-witted Yankees, petroleum 

does not appear to have been in very greal demand 

as a remedy. The odor alone, to say nothing of 
the appearance and taste, of the crude oil would 
seriously restrict its popularity for such use. 

It is not surprising, therefore, that the natural 
springs readily supplied the whole demand for 

medicinal purposes, bu1 it is hard to understand 
why such a resourceful and ingenious people as the 

American colonists had made no attempt to utilize 
the oil for any other purpose than as a quack 
remedy during the century and a half since the 
existence of the oil springs had been well known. 
The only explanation which is at all satisfactory is 
that the oil regions were too remote, and the diffi- 

36 



PAVING THE WAY FOR DRAKE'S WELL 

culties of transportation too great, to encourage 
the shipment of anything but very small quan- 
tities. 

The second step in the history of American pe- 
troleum came at the beginning of the nineteenth 
century, through the operations of the salt makers. 
Salt was an article of every-day need in the fron- 
tier settlements west of the Alleghanies, and at 
the same time the difficulties of travel across the 
mountains made it hard to get until local supplies 
were discovered. The hunters and trappers had 
noticed that the wild animals of all kinds fre- 
quented certain springs, the waters of which, on 
investigation, proved to be charged with salt. This 
discovery made it possible to secure a supply of 
salt by evaporating the natural brine, and salt 
making from local sources soon began to be a com- 
mon practice among the settlers, especially in the 
vicinity of the Ohio valley. The salt makers dug 
wells to secure their supplies of brine, since the salt 
springs did not yield enough, but, unfortunately, 
these wells when completed were frequently found 
to yield also a black oily liquid having a disagree- 
able odor, which by its persistence interfered with 
the use of the brine for salt. Even this incon- 
venience, however, did not appear serious as long 
as the wells were shallow and only small quantities 
of oil were encountered. But as the frontier popu- 
lation grew, there was pressing need for larger 
quantities of salt, to secure which deeper and 
deeper wells were necessary, until, having reached 

37 



THE STORY OF OIL 

the limit of practicable digging, the idea of drill- 
ing wells was adopted. 

The first real drilled well west of the Alle- 
ghanies, and very likely in the country, was bored 
a hundred years ago in the Kanawha valley, West 
Virginia, at a place known as the great Buffalo 
Lick or "Salt Lick." The success of this "ven- 
ture" soon led to a general practice of drilling for 
brine in the salt regions, but, with the advent of 
deeper wells, the quantities of oil encountered were 
distinctly greater. Occasionally a single well 
yielded such large quantities of petroleum thai it 
gave more oil than brine. At that time the oil not 
only had no value, but was actually regarded as a 

nuisance by the sail makers, who used nil sorts of 
devices to get rid of it. Yet, in spite of all their 
efforts, as the salt industry grew, the bad wells mul- 
tiplied rapidly; in some places to such an extent 

that the operators were forced to abandon the busi- 
ness. So the first quarter of the nineteenth century 
slipped past, with still no attempt to use this oil 
which was coming into the wells so abundantly and 
playing such havoc with the salt making. 

In 1826, however, a pioneer, one Dr. Hildreth, 
wise beyond his generation, foresaw the proper 
use for this petroleum which was troubling the 
salt makers of eastern Ohio. He published in one 
of the journals of that day an article containing 
the significant statement that "this product offers 
great resources as an illuminating agent, and will 
certainly become of great utility in lighting the 

38 



PAVING THE WAY FOR DRAKE'S WELL 

future villages of Ohio." Although the salt mak- 
ers continued to curse the stuff which ruined their 
brine, people apparently began to experiment with 
the oil, for a half dozen years later the same Dr. 
Hildreth reported that, in neighborhoods where 
it was abundant, petroleum was used instead of 
sperm oil as an illuminant and for lubricating ma- 
chinery. 

The common attitude toward petroleum, how- 
ever, can be seen from the fact that a salt well 
drilled near Burkesville, in Cumberland County, 
Kentucky, in 1829, yielded a plentiful supply of oil 
for many years, but the only attempt to use it was 
under the name "American Medicinal Oil," fol- 
lowing the example of the historic Seneca oil. 
While four years later, a famous eastern chemist 
and geologist, visiting the Pennsylvania oil spring 
regions, expressed the unqualified opinion that pe- 
troleum was of no great importance, except as its 
existence indicated the presence of vast beds of an- 
thracite coal. Luckily he lived long enough to 
appreciate fully the tremendous value of petro- 
leum in itself, and to revise entirely his erroneous 
early ideas about its relation to coal. The second 
quarter of the century was nearly over and still 
petroleum stood on the same plane where it was 
fifty years before, except for the knowledge that it 
came abundantly from deep artesian wells in cer- 
tain localities where the salt makers had operated. 

A few years prior to 1850, however, there began 
a chain of events which marked an important ad- 

39 



THE STORY OF OIL 

vance in the development of American petroleum. 
It started with the effort of a Pittsburg drug 

named Samuel Kier, to extend the use of petroleum 
for medical purposes. Conflicting stories are told 
concerning how Kier came to begin this business, 
but the important fact 1s, that he used almost every 
known means to introduce petroleum and make it 
a common medical remedy. The crude oil was put 
up in small bottles bearing the following state- 
ment: 

KIER'S 

PETROLEUM OB ROCK OIL, 

oi i.iiu; \mi> pou n i woM'i ki n. 

< i RING POWER. 

A NATURAL MEDICINE. 

PUMPEU PBOE I will, in UXB8HHT1 OOUETT, 
PBlfNSYXTAMlA, 400 VEST BELOW TBI 

BUBJTAOl Of TFIK MKil'NIi. 

Startling placards and ingenious advertising de- 
vices were used to spread everywhere the story of 

the wonderful virtues of this natural panacea. Bui 

the taste and odor were no more agreeable in Kier's 
time than they had been in the days of the original 
Seneca oil or the American oil from Kentucky. 
Though the sales were raised to afi much as three 
barrels a day, the supply greatly exceeded the de- 
mand, and the stock of bottles rapidly accumulated. 
Undaunted by this dismal failure of his oil as 
a medicine, Kier's ingenious brain quickly con- 
ceived the notion that it could be used just as well 

40 



PAVING THE WAY FOR DRAKE'S WELL 

as an illuminant, and thereupon he began to sell 
it as a lamp oil. The thick crude oil, however, was 
so full of impurities that it burned very badly and 
with an extremely disagreeable odor. Previous at- 
tempts had been made to use petroleum for illu- 
minating purposes, with more or less satisfaction 
in sawmills and workshops, but practically all ef- 
forts at household use had been unsuccessful, be- 
cause of the intolerable odor and smoke. Thus, a 
new obstacle impeded the success of Kier's enter- 
prise, although the solution of the problem was 
even then close at hand. 

About the time that Kier was trying to establish 
the claims of his oil as a cure-all, plants were being 
erected in various places for the distillation of il- 
luminating oils from coal or shale. This industry 
had started in France about 1832, had quickly 
spread to Great Britain, and then across the ocean. 
In 1846, the celebrated engineer, Abraham Gesner, 
made an illuminating oil from coal at his home in 
Prince Edward Island, introducing it into the 
United States under the trade name "Kerosene," 
and his example was soon followed by many others 
in this country. These manufactured oils met with 
almost immediate success, because they suffered 
from none of the disadvantages which prevented 
the general adoption of crude petroleum. Within 
half a dozen years from the first introduction of 
"kerosene," refineries for its manufacture were in 
operation at several places along the Atlantic coast, 
in Pennsylvania and in Ohio. The process of dis- 

41 



THE STORY OF OIL 

tilling these "coal oils" apparently suggested to 
Kier the possibility of removing the undesirable 
features of his oil by subjecting it to a similar 
treatment. At all events he tried refining the 
crude petroleum for illuminating purposes about 
1852, and after various experiments, he finally suc- 
ceeded in producing a distilled illuminating oil 
from petroleum which, though still far from en- 
tirely satisfactory, was a decided improvement over 
the crude oil. 

This first illuminating oil distilled from Ameri- 
can petroleum was used in Pittsburg, and, despite 
various imperfections, the consumption of Kier's 
"Carbon Oil "soon taxed the old sail wells to their 
utmost capacity, and began to suggest the desir- 
ability of securing additional supplies. The iirsl 
barrel of the distilled oil sold in New York brought 
seventy cents a. gallon, while at times the price rose 
as high as $2 a gallon on account of the limited 
amount available. Kier's experiments had re- 
vealed some of the possibilities of petroleum which 
could be developed through a process of distilla- 
tion, but there was not yet in existence a single well 
which had been sunk originally to secure oil. The 
entire supply still had to be secured from skim- 
ming water surfaces or from wells drilled for brine, 
a condition of affairs which would not allow petro- 
leum products to assume any great industrial im- 
portance. The time was now ripe, however, to 
usher in the final steps leading up to the birth of 
the petroleum industry. 

42 



PAVING THE WAY FOR DRAKE'S WELL 

Distilled coal oil was becoming decidedly popu- 
lar in the Eastern cities, when Jonathan Eveleth 
and George H. Bissell, New York lawyers, were 
impressed with the possibility of securing large 
supplies of a similar, cheaper illuminating oil from 
Pennsylvania petroleum. In 1854, under the name 
Pennsylvania Rock Oil Company, they launched the 
first oil company in the United States. It was a 
joint stock concern, with ten thousand shares at 
$25 each, "to raise, procure, manufacture and sell 
rock oil.' ' The entire property of the company 
consisted of some hundred acres on the famous 
"Watson's Flats/' bordering Oil Creek, in Ven- 
ango County, Pa. Oil springs had been known 
in this locality for more than two hundred 
years, and expert advice suggested it as the most 
likely region for securing a large supply of petro- 
leum. The stock of the company was placed on the 
market in New York, but a good many factors pre- 
vented its ready sale. The laws of the State made 
any holder of stock in such a company liable for 
debts of the company to the full par value of 
shares held. Petroleum development represented 
a venture then entirely untried, hence regarded as 
involving unusual risks. At that time, too, money 
was scarce, and the unloading of numerous out- 
and-out frauds had created an attitude of suspi- 
cion and general skepticism toward anything new. 

The promoters, however, believed so implicitly 
in their venture that, as a last resort, they secured 
analyses of the oil from Prof. Benjamin Silli- 

43 



THE STORY OF OIL 

man, of Yale University, one of the most noted 
chemists of that day. His report, voicing the opin- 
ion of a recognized and unquestioned authority, 
proved so favorable that several wealthy New 
Haven men expressed a willingness to take up the 
stock of the company if the company were reorgan- 
ized according to the laws of Connecticut. Rve- 
leth and Bissell had by this time become so far in- 
volved financially thai any solution of their diffi- 
culties was gladly welcomed. The result wa8 B 
new company, with the capital stock increased to 
$300,000, divided among a dozen original sub- 
scribers. 

It was soon evident, however, thai there was 
no profit to be made in operating under the old 
method of skimming the oil from the surface of 
pits and streams. Some way of securing larger 
quantities must be devised if the oil were to become 
important in domestic and industrial uses, and the 
company made a financial success. The suggestion 
which offered a solution for this problem is said 
to have come by a strange coincidence from one 
o\' Kier's old patent-medicine circulars bearing a 
picture of the artesian well from which he claimed 
to have secured his oil. It not only recalled the ex- 
periences of the salt makers who had encountered 
oil in their drilling, but it also suggested a means 
of tapping the subterranean reservoir from which 
petroleum was then supposed to come. 

The New Haven company, after many delays 
and difficulties, succeeded in formulating a plan 

44 



PAVING THE WAY FOR DRAKE'S WELL 

for a drilled well on the Oil Creek property. For 
some unexplainable reason the work was placed in 
charge of Edwin L. Drake, then a conductor on the 
New York and New Haven Railroad. He left for 
Oil Creek in 1858, and at the time of his depart- 
ure, for business purposes it is said, his employers 
bestowed on him the dignified title of " Colonel, " 
by which he was known forever after. Drake im- 
mediately began to encounter difficulties. All sorts 
of tales are told about his constant lack of funds 
and the obstacles he had to overcome in getting 
hold of even the barest necessities to carry on oper-^ 
ations, but, be that as it may, Drake unquestion- 
ably found the actual drilling of a well to be a seri- 
ous task. 

In sinking the salt wells the general practice 
had been to dig an open pit down to the bed rocks 
and then begin operations with the drilling tools. 
Along Oil Creek, however, the loose deposits were 
especially deep, and, despite all efforts, the sand 
was continually caving in and filling up the pit. 
To add to Drake's difficulties competent workmen 
were hard to get, and still harder to keep, on ac- 
count of the demand for experienced men to drill 
wells for brine, where the work was easier and the 
pay more certain. At last, in 1859, as a reward for 
his perseverance, Drake succeeded in surmounting 
his worst obstacles. To overcome the caving of the 
sand he hit on the ingenious idea of driving an iron 
pipe down to solid rock, and then operating his 
boring tools through the pipe. At the same time 

45 



THE STORY OF OIL 

he succeeded in obtaining as drillman and helpers 
one William Smith and his sons, skilled workmen, 
who had had long experience in drilling salt wells, 
among others those from which Kier is said to have 
secured his oil. 

Repeated attempts finally resulted in success- 
fully forcing Drake's iron drive pipe through 
fifty-odd feet of sand, a depth which presented 
an almost impossible harrier to the old method 
of digging in an open pit. The drillers then com- 
menced operations, and found thai they could con- 
tinue without any further trouble from ca\in«r. 

Concerning subsequent events every narrator lias 

his own tale to tell. There has been in later years 
more or less inclination to clothe the drilling of 
Drake's well with as much romance jis possible, 

hut the real facts of the case are decidedly prosaic 

Two or three feet a day was the best progress the 
drills could make, and, stopping one night with a 
depth of about sixty-nine feet to their credit, the 
men returned in the morning to find the well 
nearly full of oil. 

Then it was that the romance came. On that 
day, late in August, 1859, Drake and his drillman, 
" Uncle Billy" Smith, had brought into existence 
the first well ever dialled for oil in the United 
States, and won for themselves everlasting fame in 
the annals of the petroleum industry. With one 
stroke they had ushered in a new era for the petro- 
leum industry of the whole world. 



46 



CHAPTER IV 

BOOM TIMES AND TEIE PENNSYLVANIA OIL BUBBLE 

As soon as the news of Drake's success became 
well known, crowds of people from all sections of 
the country flocked to see the natural wonder. 
Everybody was carried away at the thought of the 
possibilities which it presented. Here was offered 
a chance to get rich quick apparently presented 
w r ith a greater degree of certainty than ever before 
in the memory of man. It was not a business that 
required years of training, long experience and 
hard work to bring success. By the investment of 
a few thousand dollars the lucky operator had be- 
fore him the chance of winning a fortune in the 
course of a few months. Vast, indeed, was the tide 
of humanity which surged into the oil regions in 
answer to these alluring prospects, bringing repre- 
sentatives from every state, from almost every 
country of the world, to try their luck in the back- 
woods of Pennsylvania. 

Men rushed by scores and hundreds to secure 
plots of land in the oil region, and, in the few years 
following 1859, wells appeared as if by magic up 
and down the valleys. In this quiet farming coun- 

47 



THE STORY OF OIL 

try the plow disappeared to make way for the oil 
derrick. Farms were sold; old and young joined 
the ranks of the speculators; and poor men to-day 

were dreaming of millions which might be theirs 
to-morrow. So great was the excitement that men 
found no sacrifice too hard to make in order to 
raise funds for a lease of a plot, whereon they could 
sink a well, with the hope of securing a fortune in 
a single season. 

During the first years of the oil boom the devel- 
opments were confined largely to the operations of 

men of only moderate means. Men of wealth ap- 
parently hesitated ahout investing in any enter- 
prise which had sprung into existence s<> suddenly, 
for in the early annals of the oil fields are found 

practically no names familiarly connected with the 
important affairs of thai day. The pioneers in t he 
held, like Drake himself, were largely a class of 
adventurers, often roving spirits who had seen 

much of the world and came here trusting to their 
wits and energy to bring them success. In the rush 
for leases and wells it soon became a case of the 

"devil take tin* hindmost. " Ignorance of the real 
character of the oil and its condition of occurrence 

made impossible any system of development ; in- 
deed, it is doubtful if any system, however per- 
fect, would have been followed, so great was the 
desire of everybody to secure a producing well be- 
fore his neighbors. It was inevitable, therefore. 
that many failed in their first ventures and, hav- 
ing staked all they possessed, were reduced to ab- 

48 



BOOM TIMES 

ject poverty. But the hope of ; * striking oil" 
seems never to have ceased in the breasts of these 
gamblers with fate. Labor was in great demand, 
wages were good, and many a laborer rose rapidly 
to be a leaseholder, a well owner and, if fortunate, 
a man of wealth in the community. 

The general appearance of the oil country was 
quickly changed. Derricks and engine houses re- 
placed the humble backwoods dwellings; and a 
spirit of restless activity took the place of former 
peaceful quiet. Two years after Drake's well was 
completed, the valley of Oil Creek, still the only 
producing locality of any consequence, had under- 
gone such a startling transformation as to be no 
longer recognizable as its former self. For ten 
miles up and down the Creek stretched continuous 
lines of tall derricks towering above the rude en- 
gine houses and board shanties where the operators 
lived. A hustling town ten miles long filled a 
valley where only yesterday had stretched green 
fields and quiet pastures. 

Oil City, on the Allegheny River, at the mouth 
of the creek, became the natural center of the in- 
dustry through its superior advantages as a ship- 
ping point. A small village proudly boasting the 
possession of a grist mill, iron furnace, hotel and 
boat landing had flourished there during the boom- 
ing days of lumbering about the headwaters of the 
Allegheny, but with the disappearance of the log- 
ging crews the place had fallen into decay, and was 
almost dead and forgotten when Drake first visited 
5 49 



THE STORY OF OIL 

the locality. The revival beginning in 18GO. how- 
ever, was tremendously rapid, exceeding in a sin- 
gle season anything that the place had ever known 
before. Capitalists, speculators, prospectors, trad- 
ers, laborers, gamblers, all kinds and classes of hu- 
manity poured in, until within a few years the 
hustling population numbered not far from ten 
thousand. 

The impetus given by these developments along 
Oil Creek inflated the values of land far and near 
in every district suspected of being an oil-bearing 
locality. To the farmers of Venango County, 
many of whom for years had been wringing noth- 
ing more than a bare living from the soil, the oil 
speculations brought a golden harvest. Many a 
poor man found himself suddenly raised to un- 
dreamed-of wealth by the sale of a homestead which 
a short time before would not have found a pur- 
chaser at any price. Land in favorable locations 
sold readily as high as six to seven thousand dollars 
an acre, and single farms brought from $500,000 
to $1,000, 000 with additional royalties on the pro- 
duction of the wells. 

Speculation of every possible sort among all 
classes went on to such an unbridled extent that it 
amounted to little less than sheer madness. Land 
speculations especially were colossal. Properties 
that were bought or leased were divided to be re- 
sold and sublet, oftentimes over and over again, 
and always at a profit, a small part of a tract not 
infrequently fetching a price greater than what 

50 



BOOM TIMES 

was originally paid for the whole lot. A plot of 
two acres, bearing a productive well, sold for over 
half a million dollars, and a farm of fifty acres, 
traded originally for a yoke of oxen, was bought 
for $3,500, and within a year its new owners re- 
fused $4,000,000 for the same tract. 

During the first years of the industry hundreds 
of wells were put down by poor men who, tempted 
by rosy visions of wealth, banded together in small 
parties or " associations,' ' pooling what few dollars 
they possessed, or could borrow, to bear the ex- 
pense of a small lease and the sinking of wells. 
Their total capital was often insufficient to secure 
a decent lease, but, urged on by their vain hopes of 
a lucky strike, they secured pitifully small frag- 
ments of land along the river front by agreeing to 
pay exorbitant royalties, even as high as one-half 
of all the oil found. Their story is the same sad 
tale found in the records of every great mining 
boom in history, except that much of the tragedy 
of frozen trails and sun-parched deserts is here 
mercifully lacking. Without means enough to se- 
cure adequate apparatus, these poor men were 
forced to adopt the most primitive devices, chiefly 
the method known as "kicking down," to sink their 
wells. This method, depending as it did entirely 
on man power, was utterly useless except in shal- 
low workings and, as most localities yielded oil 
only at considerable depth, the scanty means pos- 
sessed by the associations soon vanished, work had 
to be suspended, and the leases forfeited. Many a 

51 



THE STORY OF OIL 

modest home found itself contemplating poverty 
and distress as a result of the irresistible lure of 
the oil fields and the unscrupulous, merciless deal- 
ings of the land speculators. 

Drake's original well had begun to yield oil at a 
depth of only seventy feet, and many of the others 
which immediately followed it were of moderate 
depth, small quantities of oil being obtained by 
pumping. In the course of a year or two, however, 
the insatiable ^va^l for oil was more and more 
leading the operators to the belief that, as the oil 
seemed to come from a depth greater than yet 
reached by the wells, deeper drilling would tap 
the main source of supply and would yield larger 
quantities. This theory was put to practical test 
in the spring of 1861, when a well was drilled to a 
depth of four hundred to five hundred feel to t ho 

so-called "third sand," where the greatest supply 
has since been found. The result was unlike any- 
thing ever before witnessed in the oil regions. 
Without warning the drilling tools were hurled 
high above the derrick, followed by a stream of oil 
gushing out with such force that it could not be 
controlled for several days. When finally subdued 
the well continued to discharge at the rate of hun- 
dreds of barrels a day for several months. 

The effect of this first "gusher" was startling. 
Drake's well had created a sensation, but the strik- 
ing of a well yielding daily hundreds of barrels of 
oil without pumping was little short of a miracle. 
Everybody wanted a flowing well, and a fever of 

52 






BOOM TIMES 

deep drilling raged through the region. Other 
flowing wells were struck soon after, some of them 
producing as high as four thousand barrels a day, 
or more than the earlier wells yielded in a whole 
year. This sudden increase in the production of 
oil caused the prices of oil to slump so rapidly that 
many owners of small pumping wells were obliged 
to stop all operations because they could no longer 
produce at a profit. But at the same time it gave 
a ^great stimulus to new ventures by holding out 
the prospect of still more marvelous strikes. 

A year after the Oil Creek development began, 
the production of petroleum averaged 200 barrels 
a day. In January, 1861, it was 700 barrels a 
day, and in the spring of that year the produc- 
tion had again doubled as the result of many mod- 
erate-sized wells which had been opened. Then 
came the gushers, yielding thousands of barrels 
each, and jumping the total yield up to 10,000 
barrels a day. Some of the oil from the ear- 
lier wells had brought as high as a dollar a gal- 
lon, and in spite of the gradual decline in price 
as the yield increased, there was good profit in the 
oil selling around twenty-five cents a gallon in the 
early part of 1861. But as successive gushers were 
struck in the summer and autumn of that year 
prices almost ceased to exist. Oil was as cheap as 
w^ater, so cheap, in fact, that thousands of barrels 
w^ere allowed to run to waste into Oil Creek, and 
sales were made as low as ten cents for a barrel of 
forty-tw T o gallons. One man, having sold a boat 

53 



THE STORY OF OIL 

](ku1 of oil al a few cents a barrel is said to have 
playfully turned a stream of oil into the boat until 
it was swamped, because the purchaser complained 
that the boat as loaded was a few barrels short of 
the quantity for which he had paid. 

Many of the early operators lost heavily on their 
first ventures as a result of these low prices, but 
the losses do not seem to have shaken their faith in 
the future of the oil industry. In 1861 and 1862 
a number of refineries to handle the oil were built 
both along Oil Creek and in other parts of the 

country, and, when the production rose above the 

home demand in 1861, the dealers began to look for 

new markets in foreign countries. The first ex- 
ports of oil consisted of 27,000 ban-els sent to 

Europe in 1861. The quantity was bo large and 
unexpected thai the markets were glutted and the 
shippers suffered severely. Bui the way had been 
paved for future demands so thai within a few 
years American petroleum was being shipped to 
nearly every important port in the world. 

At the same time, other influences were helping 
to revive the industry from its marked depression. 
Production which had risen as high as 15,000 bar- 
rels a day during the winter and spring of 1 Nt >~ 
to 1863 dropped rapidly to not over half that 
amount in 1864 as the result of the abandonment 
of some wells and the declining yield of others. 
The restriction of whaling operations, as a result 
of the activity of Confederate cruisers, curtailed 
the supply of whale oil during the war, and made 

54 



THE PENNSYLVANIA OIL BUBBLE 

new demands for petroleum oils. Finally, the 
general increase of prices incident to the progress 
of the war put the profits up until they ranged 
from $3 to $10 a barrel. The industry was 
greatly stimulated ; a new wave of speculation 
greater than the first swept over the oil fields, and 
the crest of excitement mounted higher and higher. 
In the midst of it all came the marvelous develop- 
ment at Pithole Creek, the climax of the early 
boom. 

Commencing at Titusville in 1859, the tide of de- 
velopment had swept steadily over the valley of Oil 
Creek and along the Allegheny River above and be- 
low Oil City. Each succeeding year had brought 
a new crop of operators eager to invest their capi- 
tal in the venture, more than filling the places of 
those who had become discouraged or had been un- 
fortunate and dropped out. Up to 1864 Oil Creek 
had been the only important locality, and there, 
toward the end of that year, the production was 
rapidly declining. Conditions were, therefore, just 
right for a general stampede to any new promis- 
ing field. 

In the winter of 186-4 and 1865, the Fraser well, 
flowing at the rate of 650 barrels a day, was struck 
in the neighboring valley of Pithole Creek. Oper- 
ators from the older places thronged to the new lo- 
cality, and other wells were quickly sunk, with the 
most gratifying success. As soon as the glowing 
reports of six and seven thousand barrel wells were 
spread abroad, unbounded excitement prevailed on 

55 



THE STORY OF OIL 

every hand, and a grand rush for Pitholo b> 
On foot and on horseback, in wagons loaded with 
every conceivable article, crowds of men of every 
degree and profession, eager to be first among the 
lucky ones, filled the roads to this new field of 
riches. Fabulous prices were paid for the farms, 
and property changed hands with incredible ra- 
pidity. More than $20,000 was paid as a bonus 
merely for the privilege of drilling a well on a half 
acre lease near one producing well, but even at this 
price the purchaser made a handsome profit on his 

lease— by selling it to some one else. And so it 

went, feeding fuel to the flames of the oil craze in 
v\(>ry part of the country, 

A magic city sprang up on the bluff overlooking 

the wells. The town plat of Pithole City was not 

commenced until the latter pari of May, 1865, 
and within six months a modern city having a pop- 
ulation estimated from 10,000 to 15,000 stood 
where there had boon a mere handful of hoUfl 

year before. Miles of streets were lined with 

buildings, houses, business blocks, offices, ehurehos 
and hotels, and town lots were selling for $10,000 

each. Palatial hotels were erected to accommodate 

the hordes of speculators, investors, and operators. 
On all sides were the gaudy signs of sudden riches 
easily had and easily spent. 

The height of this oil madness was marked by 
enormous speculations and the extensive organiza- 
tion of so-called stock companies. In speculations 
on the oil exchange, many of the early operators 

56 



THE PENNSYLVANIA OIL BUBBLE 

who had "struck it rich" saw their fortunes vanish 
in a night before the sharply fluctuating market, 
and had to begin over again, perhaps as laborer or 
drillman. But in the stock companies people of all 
classes throughout the country were fleeced of their 
hard-earned hoards with no chance to begin again 
and quickly recoup their losses. Unscrupulous pro- 
moters bought lands or secured leases which, re- 
valued at a hundred or a thousand times their 
original cost, were used as the basis of a company. 
One Pennsylvania concern had a capital stock of 
$5,000,000 divided into a million shares, and sev- 
eral different Boston and New York companies had 
capitals placed well up in the millions. It is esti- 
mated that not less than a thousand of these com- 
panies were launched in the middle sixties, with 
stocks nominally aggregating some $600,000,000, 
while the actual amount of money invested was 
not less than $100,000,000, or more than the entire 
capital of the present Standard Oil Company. 

The best idea of these boom concerns, and the 
methods by which they played on the credulity of 
the masses may be gained from the many satirical 
accounts in the sober press of the times. One of 
the best samples is found in a pamphlet published 
in Pittsburg and represented to be the prospectus 
of "The Munchausen Philosopher's Stone and Gull 
Creek Grand Consolidated Oil Company/' with a 
capital stock of $4,000,000,000; a working capital 
of $37.50 ; paying guaranteed dividends semi-daily 
except Sundays. The Munchausen Company held 

57 



Y 



THE STORY OF OIL 

four tracts, the one from which the concern was 
named having already a shaft some 16,000,000 feet 
deep and "yielding cooking butter, XXX ale, tur- 
tle soup and bounty money" among other things 
too numerous to mention. The "Moonshine Tract" 
was heavily wooded; the " Ananias and Sapphira 
tract" was small, embracing only 65,000,000 acres, 
while the "China and Hades tract" was known to 
be "especially rich in tea!" Far fetched as this 
satire appears to us now, it pictures most vividly 
the absurdity of some of the claims set forth in the 
pretentious circulars of speculative companies. In 
actual prospectuses which have been preserved as 

curiosities are found the elaborate descriptions of 
$1,000,000 concerns with a working capital of 
$20,000; shares selling at a tenth, or even a fiftieth, 
of their par value, " for the benefit of the public"; 
and properties, uol even known to be oil produc- 
ing, guaranteed to pay at least five per cent, divi- 
dends monthly. 
This speculative craze reached its height in 1865, 

and then the bubble burst. A variety of causes 
aided in precipitating the crash. The yield of the 
great Pithole wells fell almost to nothing; fires 
swept away whole blocks; the operators and the 
roving multitudes moved on, and in a few years 
Pithole City, the magnificent, was merely a mem- 
ory. Its once crowded streets are now flourishing 
grain fields, and where the famous wells stood is 
no sign of oil. The great floods and fires in the 
spring of 1865 destroyed large amounts of oil prop- 

58 



THE PENNSYLVANIA OIL BUBBLE 

erty throughout the region. The reaction follow- 
ing the close of the war brought reduced returns 
from the foreign shipments. Many of the fraudu- 
lent oil companies were exposed, causing suspicion 
to be cast even upon the most legitimate operations. 
A war tax of $1 per barrel for national revenue 
still further added to the depression. Many own- 
ers of oil property, discouraged by the outlook, 
were so anxious to realize on their holdings that a 
rapid reduction of values began. 

In the face of these adverse conditions stock 
company after stock company failed to meet the 
expectations of the stockholders and lost their sup- 
port. The fraudulent concerns were already rap- 
idly going to the wall, and in the fall and winter 
of 1867 to 1868 the companies toppled over right 
and left, one after another, like a row of bricks, 
carrying down to ruin thousands of people whose 
entire capital had been invested in them. The de- 
pression in the oil regions was universal. Thou- 
sands of acres of oil lands held by the bankrupt 
companies, their engines, tools and machinery had 
to be sold by the sheriff to pay their debts. Equip- 
ment which represented an investment of $2,000 
or $3,000 sold at auction for less than a hundred. 
The collapse of the great oil bubble was complete 
and disaster reigned temporarily in the oil fields. 

But the stagnation was short-lived. Increased 
consumption and better prices abroad ; improved 
means of transportation and storage at home; the 
ridiculously low prices at which engines and drill- 

59 






THE STORY OF OIL 

ing machinery could be secured in forced Bales, 
and the decreased production owing to a suspen- 
sion of operations, all combined to make the out- 
look brighter when the Tidioute pool in Bradford 
County was opened in 1868, and gave the necessary 
new impetus to the business. From that time the 
industry has increased with enormous strides, not 
entirely without temporary booms and reckl 
speculations, but never again in danger of toppling 

to ruin. 

Such is the story of the rise and fall of the first 
great oil boom, and the greatesl of all the oil bub- 
bles which this country has ever seen. In a mi 
ure, however, history has repeated itself in every 
on e 6£ the fields discovered since Drake's firel ven- 
ture a h.,11' century ago. To all these places the oil 
derrick has come like a conquering army driving 
;l H ,„.,•„.,, it . Famis. fields, orchards. gard< 

dooryards, and even homesteads have been given 
over to the mad search for oil. In nearly all appear 
the same steps of progress; s lucky strike, the rush 

for leases, sudden wealth to the fortunate ones. 
boom towns, stock companies, and sooner or later 
the inevitable decline. 

Whole volumes might be written about the un- 
paralleled ups and downs of fortune during the 
great boom of the sixties. But saddest of all was 
the fate of Drake, the pioneer. lie not only failed 
to take advantage of the early boom, winch he him- 
self had started, but he also neglected to patent his 
. process of drilling, which had been adopted by 

60 



THE PENNSYLVANIA OIL BUBBLE 

everybody and would have paid him valuable roy- 
alties. Early in the sixties he sold out all his in- 
terests in the oil fields and removed to New York, 
where he speedily lost all his property in specu- 
lating on the petroleum exchange. For a time he 
and his family were reduced to actual want, but, 
much to the credit of his former associates, as soon 
as his pitiful condition became known, a purse of 
several thousand dollars was collected for him. 
Subsequently the State of Pennsylvania granted 
him a pension of $1,500 a year as a mark of grati- 
tude for the service he had rendered the country. 
Great indeed was the part which Drake had played 
in blazing the way for the modern petroleum in- 
dustry. But just as a chance fate brought him, a 
poor conductor from a New England railroad, to 
be the prophet of a new era, so the same wheels of 
chance denied him the full fruit of his service. 
Nothing could be more truly typical of the oil 
boom. 






('H AFTER V 

THE PRODUCTION OF PETROLEUM 

The unprecedented oil boom which marked the 
years following the discovery of Drake's well, and. 
in fact, the tremendous development of the indus- 
try later in all parts of the world, was primarily 
due to the introduction of now methods of obtain- 
ing crude petroleum from the underground sources. 
So far as can he determined every important pe- 
troleum industry lias gone through tic same three 
distinct steps in its evolution. First, the skimming 

of oil from the surface of st reams, pools or springs ; 
then, the advance to dug wells or pits, and finally, 
the advent of the modern drilled well in one form 
or another. The first two of these methods of se- 
curing the ci ude oil have been typical of the primi- 
tive industries in every country, although, in cer 

tain cases, the extensive development of dug wells 
must be regarded as a sort of transition stage be- 
tween the ultra primitive and the truly modern. 

In this country, the early skimming operations 
were done with a broad fiat board, made thin like a 
knife on one edge. By moving this board forward 
just under the surface of the water, it soon became 

62 



THE PRODUCTION OF PETROLEUM 

covered with the thick, adhesive oil, which was re- 
moved by scraping the board on the edge of some 
receptacle. Variations of the same idea are found 
in other primitive operations, but all of these meth- 
ods of working surface accumulations were capa- 
ble of yielding only very small amounts, and, as 
man came to use petroleum more extensively, it was 
necessary to devise other means of getting the de- 
sired quantity. 

The digging of wells to secure petroleum appears 
to have been first and most extensively developed 
in Oriental countries, especially in China, Japan, 
and Burma. Some of the Japanese wells in the 
district about Echigo, dating back into the early 
part of the Christian era, are said to have reached 
a maximum depth of 900 feet, though the majority 
rarely penetrated more than 200 feet. Excavation 
by hand to such depths in a well only a few feet 
square seems like a Herculean task, yet the cost 
is said to have been only a few hundred dollars 
for a well, or no more than the cost of the shal- 
lowest drilled wells of modern times. Common dig- 
gers, working for ten cents and a small portion of 
rice beer, per day, explain the mystery of cheap- 
ness. Under no other conditions could the indus- 
try have been carried on, for a daily yield of a few 
gallons, laboriously pumped by hand, was all that 
could be expected from these wells when completed. 

The Burmese oilmen used a sort of primitive 
method of drilling, with the practice unchanged 
until comparatively recent times. As soon as the 

63 



THE STORY OF OIL 

laborers encountered solid rock in their digging, 
a prismlike lump of iron, weighing about 150 
pounds, was suspended by a cord from a beam 
across the mouth of the pit. Then the cord was 
cut, allowing the iron to fall, the sharp edges cut- 
ting and puncturing the rock. After each fall it 
was necessary for a man to descend and attach a 

rope for hauling the iron up again. By tins slow. 

laborious method the wells were sunk to depths of 

250 or more feet, despite the fact that the presence 
of inflammable gases prevented the use of any ar- 
tificial light, the \\<»rk going on in absolute dark- 
ness, and no man being able to work more than 
five minutes at a time. Here, also, ;is in Japan, 
pumping by hand with a primitive form of wind- 
lass, rewarded their efforts with a few barrels of 

oil daily. 

In these localities, as in the fields of Western 

Asia and Europe, the dim- well — like the ordinary 

well for household water supplies— -was extensively 
used, and continued to he the chief source of petro- 
leum until comparatively late in the last century. 
Even now, in some of the more remote districts of 
Galicia, Roumania, Burma, and Japan, the primi- 
tive methods are still followed. Bui the widely 
heralded success of the American oilmen and the 
desire for more oil quickly placed modern tools 
and up-to-date machinery where tedious methods 
and crude implements had held sway for scores of 
generations. 

The fact that Drake was the first in the United 
64 



THE PRODUCTION OF PETROLEUM 

States to sink a well solely to secure oil is of inter- 
est historically, yet far more significant to the pe- 
troleum industry is the fact that his was a drilled, 
not a dug, well. His success marks the real start- 
ing point in the development of the modern indus- 
try by preparing the way for the subsequent deep 
borings, without which the present enormous de- 
mands for oil could not be satisfied. It also made 
available for the first time a relatively economical, 
rapid, and efficient means of testing or prospecting 
for oil in localities regarded as probable oil pro- 
ducers. 

That the artesian well was the one thing for 
which the petroleum industry was waiting is evi- 
dent from its rapid adoption on all sides, and the 
gigantic expansion of operations immediately aft- 
erwards. To every place where oil is an important 
product, American methods, American tools, and 
American workmen have found their way, until, 
at the present time, the drilled well claims the pe- 
troleum industry of the whole world as its own. 

The first step in oil production, of course, is the 
location of the well. Drake was guided in his choice 
of locality by the existence of oil springs in the 
vicinity, and in a vast number of oil discoveries 
since then, the initial well has been sunk because 
of the occurrence of "surface indications " of some 
kind. The famous Baku district, for example, is 
probably the most important of all the localities 
in the world where outward appearances indicated 
the presence of large underground deposits. 
6 65 



THE STORY OF OIL 

Many of the most valuable oil deposits, how- 
ever, have been revealed by the more or less ran- 
dom process of " wild-catting.' ' To call a well a 
" wild-eat' ' venture means merely that the drilling 
is done on untested territory, or on land not defi- 
nitely known to be oil producing. The wild-eat 
operation is, therefore, an out-and-out gambling 
process, by a man who is willing to stake a few 
thousand dollars against heavy odds that he will 
find oil at some depths in a drill hole a few inches 
in diameter. If luck favors him, his winnings may 
be enormous; if lie loses. Ins only hope is to pull up, 
leave the hole where his money is sunk, and move 
to some other place. 

In the beginning of the industry, there were 
frequent absurd attempts to locate oil deposits by 
the divining rod, by clairvoyance, or through spir- 
itualism. The divining rods used were exactly the 
same sort as are still heard of occasionally in locat- 
ing wells tO be dug for water— a simple crotch of 
wood, which is believed to turn over above any 

place where water is to be found. Using the same 
method for two substances as unlike as are water 

and oil appears ridiculous on the face of it, but the 
expert fakirs pretended that they could detect a 
difference in the action of the two substances 

their ma^'ic wands. Clairvoyants and spirit me- 
diums visited the oil regions at different times and 
essayed to tell where oil would be found. It is 
highly amusing to find them referring to "flow- 
ing streams" of oil, their supposed spirit advisers 

66 



THE PRODUCTION OF PETROLEUM 

apparently having suffered from the same degree 
of ignorance as did ordinary human beings of that 
day concerning the nature of oil deposits. Some 
credence was occasionally placed in these so-called 
manifestations of practical spiritualism, but, as 
might be expected, nothing of importance ever 
came of it. 

The choosing of the actual site for a well, even in 
proved territory, is a ceremony which varies ac- 
cording to the personal whims of the operator. 
Every man has his own pet theory about how it 
should be done. One man measures distances with 
scrupulous accuracy, plots the ground, and gath- 
ers every available scrap of information before he 
is ready to set up his drill. Another drives a 
stake more or less at random and there begins 
work. Success is quite as likely to crown the 
efforts of one as the other, for there is no pos- 
sible way of foretelling what may be found 
until the drill actually reaches the oil-bearing for- 
mation. 

After the site of the proposed well has been se- 
lected in one way or another, the next step is the 
erection of a "derrick/' or 4t rig, " as the oilman 
calls the framework by which his string of drill- 
ing tools is handled. In its simplest form, the der- 
rick consists merely of four strong uprights held 
securely in position by cross-ties and braces. For 
deep drilling, where a long string of tools must be 
raised and lowered, derricks reach a height of 70 
or more feet, and are 20 feet on a side at the base. 

67 



THE STORY OF OIL 

In shallow workings, heights of not more than 30 
feet are common. 

As soon as the derrick is completed, and the en- 
gine installed to furnish power, actual drilling op- 
erations can be begun. The first step is the sink- 
ing of the conductor or drive pipe through the 
soil to bed rock: often a wooden conductor when 
the rock is near the surface, but always an iron 
drive pipe when the surface deposits are deep. 
Several hundred of the first wells that were sunk 
in this country were drilled by the process known 
as "kicking down," or by the use of a "spring 
pole." In this process a post, driven deep in the 
ground outside the derrick, supported a stout tim- 
ber bearing the tools at one end and a weight to 
counterbalance them at the other end. On each 
side of the drill were fastened loops or " st irru ps. ' ' 

The drillers, by placing one foot in the stirrups 

and "kicking, 91 or "jumping" down, made the 
heavy drill strike the rock, while as soon as the 

men lifted their feet, the counterweight would 

raise the drill ready for another stroke. In the 
spring pole method an elastic pole securely fas- 
tened at one end was used instead of the balanced 
timber. Both of these methods were employed ex- 
tensively in the Pennsylvania fields, but they were 
essentially a poor man's makeshift. They were 
effective only in shallow wells, and were quickly 
discarded when the superiority of deep borings was 
recognized. 

At the present time there are two main systems 
68 



THE PRODUCTION OF PETROLEUM 

of drilling, depending on the form of apparatus 
used: the American and the Canadian, or, as they 
are more commonly called, the rope or cable sys- 
tem, and the rod system. 

The drilling tools in the American system are 
suspended by means of a hemp rope or wire 
cable, which passes through a pulley wheel or 
block at the top of the derrick. The " string of 
tools," as it is usually called, is divided into two 
parts, the lower part giving the downward or cut- 
ting stroke, and the upper part giving an upward 
stroke to loosen the drill from the rock. Between 
these two parts come the "jars," one of the most 
important adjuncts of successful drilling. The 
jars resemble two long flat links of a chain sliding 
back and forth on each other with perfect ease. 
The lower part of the string of tools consists of 
the drill, or bit, the auger stem into which it fas- 
tens, and the lower half of the jars. The upper 
part of the string includes the other half of the 
jars, the sinker bar, and the rope socket. The dif- 
ferent tools vary widely in size and weight, but, 
for ordinary deep drilling, the whole string will 
measure somewhere about 60 feet long, and weigh 
from 1,800 to 2,200 pounds. The auger stem and 
the bit usually make up more than half the total 
weight. If the weight of the lower half of the jars 
is included, it appears that approximately two 
thirds of the weight of the whole string is in the 
lower part. 

During the process of drilling, the string of tools 
69 



THE STORY OF OIL 

is connected by the cable to a walking beam, oper- 
ated by a small engine. At each movement of the 
beam, the tools rise and fall with a regular monot- 
onous clank. On the downward stroke, the upper 
half of the jars slide part way down* into the lower 
half, but as the walking beam rises, the slack is 
taken up, and the jars are quickly drawn out to 
their full length, delivering a sharp upward blow 
which serves to loosen the drill. The impact of 
the heavy drill, falling forty or more times a min- 
ute, and constantly turned by the drillman, pul- 
verizes the rock into sand, the rate of drilling vary- 
ing from a few feel to possibly a hundred feel a 

day, according to the nature of the rock. The proc- 
ess of drilling appears simple enough in principle, 

but in actual operation the regulation of the 

stroke to take the greatest advantage of the blow 

requires mueli skill on the part of the drillman, 

whose sole guide is the "leer' of the tools as he 

regulates their movement. 

Besides the tools actually used in cutting the 
hole through the rock, the usual drilling equipment 
includes a great variety of accessory implements to 
be used in special cases: reamers to enlarge the 
bore holes; sand pumps and bailers to remove the 
powdered rock, water, and oil ; and elaborate "fish- 
ing" tools to be used in case of accidents. These 
fishing implements especially occupy a prominent 
position in the drillers' equipment, since at any 
time a broken cable or string of tools may put an 
end to further work unless the well can be cleared. 

70 



THE PRODUCTION OF PETROLEUM 

By means of one or another- of the fishing tools it 
is possible, at depths much over 1,000 feet, and 
in a hole nowhere over a foot in diameter, to 
cut off a broken cable, unscrew a string of tools, 
and raise the parts one by one, or even to cut a 
new thread on the end of a broken tool, so that a 
socket can be screwed on it again. Frequently 
-weeks are spent in patiently fishing for a lost 
string, when, without accidents, the entire well 
could be completed easily in less than a month. 

The process of drilling, aside from occasional 
accidents, consists essentially in keeping the ma- 
chinery going twenty-four hours a day. The drill- 
ing crews work in shifts of twelve hours each, each 
shift including a drillman and one or more tool 
dressers to assist him. At varying intervals, the 
tools are drawn out in order to replace the bit with 
a sharper one, this drawing out and returning the 
tools to the drill hole being the process where the 
derrick with the pulley at its top is necessary. 
While the bits are being changed, a sand pump, 
wiiich is really only a tube with a valve in the bot- 
tom, is sent down to clean out the accumulation of 
pulverized rock in the drill hole. This cable sys- 
tem of drilling is best suited to deep wells, and has 
been adopted extensively in Russia, Burma, and in 
most other places where it has been necessary to 
exceed a depth of 1,000 feet. 

The Canadian, or rod, system differs from the 
American system principally in the use of slender 
wooden or metal rods in place of the cable, a sim- 

71 



THE STORY OF OIL 

pie auger, like a carpenter's auger on a large scale, 
instead of drills, and a different transmission of 
power. This system was developed to meet the 
conditions of the Petrolia oil regions in Ontario, 
where boring in the greasy clays was done with an 
open clay auger turned by a horse traveling in a 
circle. Rods of tough, long-grained, white ash, 
two inches in diameter, were used originally, but in 
some of the places where the Canadian system wi 
introduced later it was necessary to use iron rods/ 
The rod system isbesl in many places for moderate 
depths and where inclined strata make it extremely 
difficult, often impossible, to keep the drill hole 
straight, it* the cable system is tried. An improve- 
ment on the Canadian system is the modern method 
of diamond drilling, as it is called, in which the 
drill consists of a hollow rod with a diamond or 
steel crown, a continuous supply of water being 
forced through the rod to keep the crown cool and 
to carry off the debris. It is a more rapid method 
than either of the others, and in deep drilling is 
regarded as cheaper in the (Mid. 

The condition of the strata in many places pre- 
sents serious difficulties to all drilling operations. 
In the California fields, for example, slipping and 

caving of the highly inclined layers is a constant 
source of trouble, so that it becomes necessary to 
insert iron casing pipes as fast as the drill pene- 
trates the rock. Under these conditions it some- 
times takes a year to complete a well, and the cost 
of the casing alone is much greater than that of a 

72 



THE PRODUCTION OF PETROLEUM 

completed well in Pennsylvania. Single wells in 
the Coalinga field, California, where the conditions 
are particularly bad, have cost upward of $30,000. 
Similar trouble is encountered in the Russian dis- 
tricts, often to such an extent that wells have to be 
started with a drill two or more feet in diameter at 
the surface, in order to have the necessary room 
for the tools, as successively smaller casings are in- 
serted with increasing depth. 

Oil wells, in general, when completed, may be 
regarded as consisting of three sections: first, the 
surface portion in the deposits of loose gravels and 
clays; second, the middle portion through the dif- 
ferent strata which usually contain more or less 
water; and third, the lower portion in the oil 
sands. The conductor or drive pipe passes through 
the first section. Iron casing pipe is used in the 
middle section to keep ground water from becom- 
ing mixed with the oil, and making the well 
"roiley," as the oilmen say. Originally, the so- 
called "seed bag" was used to close the end of 
this casing, the device consisting of a simple leather 
bag filled with dry flaxseed, slipped over the cas- 
ing, and pressed down to the top of the first oil 
sand. The swelling of the flaxseed, as soon as it 
was wet, quickly filled the space between the pipe 
and the sides of the drill hole, effectively shutting 
out all water from above. 

The general practice in latter years, however, 
has been to sink a large steel-shod, iron drive pipe 
down to bed rock. Drilling begins with a hole 

73 



THE STORY OF OIL 

from eight inches to a foot in diameter, extending 
from the bottom of the drive pipe to the bottom of 
the lowest water-bearing stratum. Then, by reduc- 
ing the size of the bore, a beveled shoulder is made 
in the rock, and a casing pipe, having a collar de- 
signed to fit water-tight on the beveled surface, 
shuts off all the water before the tower portion of 
the well is drilled. Thus, the ground water is posi- 






An OpeD Ditch Carrying Oil to ao Earthen Reservoir. 



tively excluded from the oil and a1 the same time 
its interference with drilling operations in the 
lower pari of the well is lessened. 

As regards depth, time to drill, cost of comple- 
tion, and yield when finished, different wells, even 
in the same region, vary greatly. Drake's well was 
seventy feet deep, took a long time for completion, 
and yielded only a few barrels a day when done. 
Since then deeper drilling has been generally re- 

74 



THE PRODUCTION OF PETROLEUM 

sorted to, in order to secure as large supplies as 
possible. In the Baku district, for example, it has 
been a common custom to continue boring, even 
after oil is actually struck, until the oil flows from 
the mouth of the well; there, w r ells side by side 
vary by hundreds of feet in depth. Recent opera- 
tions in this country have extended wells to depths 
of more than 4,000 feet, although, in such cases, the 
difficulties of drilling are very great, and the cost 
increases rapidly. Where the drilling is easy, and 
the depth not great, profitable wells may be com- 
pleted easily in two or three weeks, at a total cost 
of only a few hundred dollars, as in some of the 
Ohio districts. In the face of natural difficulties, 
accidents, or the necessity of penetrating to greater 
depths, the cost mounts upward rapidly to as high 
as $30,000 or $40,000. 

No less variable is the yield of different wells, 
ranging from the non-productive "dry" holes or 
"dusters" to the gigantic spouters pouring forth 
millions of gallons a day. On the basis of the 
general character of the yield, wells are divided 
into two classes, the flowing, spouting, or gushing 
wells, and the pumping wells. The character of 
the yields, however, does not necessarily indicate 
whether the venture is a profitable one. In some 
cases the cost of drilling is so great that a well 
flowing less than a hundred barrels a day would be 
regarded as a financial failure, while another well, 
much less expensive to drill, might be profitable if 
only a pumping well at twenty barrels a day. 

75 



THE STORY OF OIL 

The flowing or gushing wells are always re- 
garded as lucky strikes among oilmen, partly be- 
cause they usually mean exceptionally Large quan- 
tities of oil, and partly because there is no cosl of 
operating the well, as Long as the oil issues from 
the ground of its own accord. Striking, indeed, 
are the scenes connected with the opening of one 
of these wells. The monotonous dank of the drill 
,„„. m i n ute is replaced tin' next by a sudden rush 

upward, tlir tools arc hurled high in the air. and 

a sirran. <.f nil rises Tar above the derrick, like a 
gigantic geyser, deluging everything about as it 

falls hack to earth. 

M,,st of the importanl nil fields have at Borne 
tilll( . ,„. ther afforded tin- interesting spectacle of 
flowing wells, the mot! famous in this country be- 
ing the memorable gushers of the Texas ftel 
which helped swell ihc.nl boom in that state a few 
years ago. The Baku region, however, stands an- 
rivaled in the number and enormous size of its 
fountains, some of which have burst forth with 
such uncontrollable violence that they have been a 
source of Loss rather than of profit to their own- 
era The famous Droojba fountain, struck in 18 
spouted a mixture of nil ami sand to a heighl ol 
more than 200 feet, buildings near by were buried 
ouderthe deluge of sand, while a broad stream oJ 
oil flowed away toward the Caspian Sea. Since 
then, many other still greater spouters have 

been developed there, shooting columns ol oil to 
heights of 300 or 400 feet, soaking with od every- 

76 



THE PRODUCTION OF PETROLEUM 

thing within a mile or more of the well, and belch- 
ing forth as much as 6,000,000 gallons of oil daily. • 
With such enormous quantities of oil poured out 
so suddenly, the greatest difficulty is often experi- 
enced in controlling the flow, and the anxious 
operators have often found themselves absolutely 
powerless until millions of gallons, worth thousands 
of dollars, have been lost. 

When the natural flow of petroleum ceases, as a 
result of relieved gas pressure, and commonly in 
completed wells which do not flow, the practice 
known as " shooting' ' is resorted to in the hope of 
increasing the yield. 

The early erroneous belief that petroleum oc- 
curred in fissures is supposed to have prompted the 
use of the " torpedo," the idea being to break up 
the strata around the bottom of the well, and se- 
cure the yield from as many fissures as possible. The 
scheme was first suggested by a Colonel Roberts, 
in 1862, but, for fear of the effect on the well, it 
was not given a trial until two or three years later, 
when, in a single trial, its success was immediately 
demonstrated. The process consists simply of dis- 
charging some powerful explosive, usually nitro- 
glycerin, at the bottom of the well, a single charge 
sometimes ranging as high as 200 quarts. Shooting 
wells is one of the few spectacular features con- 
nected with the petroleum industry, but to the op- 
erators it is purely a matter-of-fact business propo- 
sition. The nitroglycerin, which needs but the 
slightest jar to explode it, is transported over the 

77 




Shoot ins; an Oil Well. 



THE PRODUCTION OF PETROLEIM 

roughest mountain roads, in padded wagons to be 
sure, but still in a way to appall the stoutest heart 
of any but the shooters themselves. Sooner or later, 
it is said, the majority of shooters meet violent 
deaths at this precarious trade. From the spectac- 
ular standpoint, the operation of shooting stands 
nearly on a par with the striking of a gusher. The 
heavy shock of the explosion shakes the earth, as in 
an earthquake, then the dull muffled report is fol- 
lowed by a jet of oil, water, and fragments of rocks, 
leaping a hundred feet in the air, and falling back 
to the earth like the outburst from some monster 
fountain. Shooting a well, if successful, gives an 
increased production for a time, though not neces- 
sarily a greater total yield. In extreme cases, par- 
ticularly in wells yielding very high-grade oil, 
shooting may be tried three or four times, but, as 
a rule, with poorer success each time. 

Soft strata, such as are found in some of the Cal- 
ifornia fields, and about Baku, make the torpedo 
practically useless, hence in these fields and some 
other districts shooting is never employed. 

From the glory of the most gigantic spouter, a 
gradual declining yield of the well is inevitable 
and, whether "shot" or not, it rapidly descends to 
the humdrum life of a well which must be pumped 
in order to produce oil. Few wells flow for more 
than a short time, and then pumping* by some 
method or other must be employed as long as the 
total yield warrants it. 

Pumping in the old days was done with a cen- 
79 



THE STORY OF OIL 

tral boiler using coal for fuel, and connected by 
a network of steam pipes, with an engine at each 
well. Now a single engine serves for dozens of 
wells, scattered all over a large area, and makes 
possible a wry materia] saving in power. The 
pump itself is the perfection of simplicity; below 







Storage Tank for ('rude ( )il. 

ground a tube runs almost t<> the bottom of the 

well, with a valve near its lower end ; a pump rod 
working up and down in the tube completes the 
apparatus in the well. On the Burface a simple 
combination of two levers, called the "jack," 
mounted on a framework transforms the horizon- 
tal pull on the rod or cable from the engine into 
a vertical pull on the pump rod. The economy of 

SO 



THE PRODUCTION OF PETROLEUM 

power is carried still further by pairing the wells, 
so that the upstroke in one coincides with the 
downstroke in another. In this way a hundred 
wells may be pumped by a single gas engine so 
cheaply that a well producing half a barrel a day 
can be operated profitably. 

This business of getting the crude oil out of the 
ground is undoubtedly attended by more risks and 
uncertainties than any other phase of the entire 
industry. In the first place, when drilling is be- 
gun there is no certainty that it will be successful. 
Even when a productive well is struck, there is no 
possible way of knowing the extent of the supply. 
The story of Pithole City, and of other boom 
places, tells how suddenly and unexpectedly a 
region may "go dry." Still more vital, however, 
is the fact that the oil cannot be kept in storage 
underground, as any other mineral may be left in 
the mine, and be removed as it is wanted. All the 
wells in a locality usually draw their oil from a 
common source, and if any well owner stops pro- 
ducing, the neighboring wells will get more than 
their share. This condition of things explains the 
eagerness of each operator to drill faster and pump 
faster than his rivals. Whatever the price of the 
oil, therefore, production practically never ceases 
until the well is exhausted. 



CHAPTER VI 

THE EVOLUTION OF BULK CARRIERS 

It is not unlikely that the American petroleum 
industry would have developed sooner it" the oil 
regions had been in less out-of-the-way places. In 
Pact, recent years have frequently afforded the 
spectacle of localities in which expansion was not 
possible until the necessary means of communica- 
tion were afforded. The American oilmen were 
the first to realize thai the proper solution of the 
transportation problems meant not only access to 
the most remote of the world's markets, hut the 

practical control of the most important. This real- 
ization and the clear vision of the solution, it is 
true, came only as the result of experience in the 
early years of the industry-; yet when the realiza- 
tion did come, the evolution of the modern trans- 
portation system was rapid. 

The first shipments from Oil Creek to Pittsburg 
are said to have been made in five-gallon cans slung 
on the back of a pack horse. As soon as the im- 
portant developments on Oil Creek were begun, 
however, overland shipment of the oil was no 
longer adequate or practicable. The natural solu- 

82 






THE EVOLUTION OF BULK CARRIERS 

tion was to ship by water down the creek to Oil 
City, or from Oil City, as a starting point, clown 
the Allegheny River to Pittsburg, the nearest and 
most convenient distributing center. Thus there 
grew up an extensive system of transportation by 
wagons from the wells to the river, and by boats 
or barges down the river. 

Within a short time hundreds of wagons, carry- 
ing from five to seven barrels each, were traversing 
the streets of the shipping points daily. The roads 
of the oil region originally were none too good, and 
now their condition became indescribable. Inces- 
sant traffic turned the soft alluvial soil of the river 
"bottoms" into unfathomable mud, through which 
the horses could barely struggle. Broken wagons 
and oil barrels lined the roads, and "Oil Creek 
mud" became a byword. Yet as slow, expensive, 
and unsatisfactory as it was, wagon transportation 
continued to monopolize the land carriage for some 
time. 

At the shipping points along the creek the oil 
was transferred to flat-bottomed boats and barges 
in which it was conveyed to Pittsburg for distribu- 
tion. Boats of all sorts and sizes were pressed into 
use, from the smallest wooden flatboat carrying a 
score of barrels up to big barges carrying a thou- 
sand barrels. On account of the shallow water 
in Oil Creek it was necessary to make use of the 
"pond freshet," as it was called, to float the loaded 
barges down the creek to the deeper waters of the 
Allegheny at Oil City. These artificial freshets 

83 



THE STORY OF OIL 

had originated with the logging crews and con- 
sisted mainly in gathering the logs behind a tem- 
porary dam, which, when removed, cause. I a small 
flood wave lasting a few hours to run downstream. 
In this way the logs, keeping pace with the en 
of the Hood, could be carried successfully across 
the shallow portions down to the deep water of the 
main stream. The oilmen borrowed this idea bod- 
ily from the lumbermen, the oil barges replacing 
the log drive. 

It was, however, necessary for the oilmen to 
make previous arrangements with the mill owners, 
who controlled the water privileges, to let them 
have enough water for the freshet, several hundred 
dollars sometimes being paid for this accommoda- 
tion. Public notice of each freshet was always 

given, so that as many boats as possible might he 

ready to take advantage of it. Sometimes as much 

as 20,000 barrels wenl down Oil Creek on a single 

flood wave. "Freshet Days" were regarded as 

genera] holidays by the people along the creek; 

everyone who could accompanied the boats to Oil 

City, and the gay crowds gave a decidedly festive 

appearance to that place. Prom the standpoint 

of the shipper, however, this method was far from 
satisfactory, for the freshets were almost always 
accompanied by accidents. Boats ran aground and 

others jammed behind them, the smaller ones be- 
ing overridden and crushed by the larger, the 
losses in some cases amounting to thousands of bar- 
rels of oil. 

84 



THE EVOLUTION OF BULK CARRIERS 

It is estimated that no less than 1,000 boats of 

all kinds were used in the height of the river trans- 
portation. At first they carried oil either in bar- 
rels or in bulk, but the use of barrels was always 
troublesome on account of the leakage. To rem- 
edy this difficulty, the inside of the barrels was 
specially treated with a stiff solution of hot glue, 
forming a continuous lining unaffected by the oil. 
Even this device afforded only a partial remedy, 
since the small amount of water usually mixed with 
the oil quickly affected the glue and the leaking 
became as bad as before. 

The steadily increasing dissatisfaction with bar- 
rel shipments soon led to the idea of carrying the 
oil in bulk; for a time it was done by running the 
oil into open barges, but this plan presented v 
difficulties than the old way. Any slight rocking 
of the boat would set the oil in motion, and losses 
of whole cargoes from capsizing were frequent. 
When the boats did not capsize they were always 
leaking and the presence of water seriously im- 
paired the quality of the oil. Because of these 
drawbacks to early bulk shipments, the producers 
usually reverted to the use of barrels when the 
price of oil was high, the probable loss from leak- 
age being less risk than the chances of accident to 
the cargo in bulk. 

The suggestion of using water-tight compart- 
ments in barges that were decked over presented a 
possible solution of all the earlier troubles. Such 
barges were introduced and, proving immediately 

85 



THE STORY OF OIL 

successful, they sealed the doom of the old-fash- 
ioned barrel shipments as far as local handling of 
crude petroleum was concerned. 

For five or six years the teamers on laud and 
the bargemen on the river controlled absolutely the 
entire system of transportation and were able to 
make their rates irrespective of the price of oil or 
the profits of the producer. The railroads center- 




Tank Cars. 



ing toward the oil regions, however, had long been 
jealously watching and coveting the enormous 
freight traffic moving up and down the Allegheny 
River between Oil Creek and Pittsburg. The greal 

boom of Pithole City increased the already strong 
desires to have a share in the profitable business, 
and by the early part of 1866 branch lines of the 
main railroad systems were entering Oil City, Pit- 
hole, Titusville, and Franklin. Mile after mile was 
rapidly added, until within a year the oil region 

86 



THE EVOLUTION OF BULK CARRIERS 

had railroad connections in every direction with 
all the leading cities of the country. 

Rail shipments from the beginning adopted the 
idea of handling in bulk, being made at first in 
so-called "tank cars," which consisted of nothing 
more than two wooden tanks, of about forty bar- 
rels each, securely fastened to an ordinary flat car. 
Only a few years later, however, the modern cylin- 
der tank of boiler iron easily demonstrated its 
superiority and entirely replaced the older style. 
This entrance of the railroads in rapid succession, 
with the trains of tank cars, gave an entirely new 
complexion to the transporting end of the business. 
The general interests of the operators were greatly 
advanced by the ease with which shipments could 
now be made throughout a much wider range of 
territory. Bulk cargoes could be sent to New York 
or Philadelphia for the export trade as readily as 
they could have been shipped to Pittsburg before. 
Important producers conveniently located were 
able to have their own spur tracks and load di- 
rectly from their storage tanks. But for many 
operators not so favorably situated the old incon- 
veniences were only slightly lessened. 

The advent of the railroads, important as it was. 
could not rid many of the producers of the trouble- 
some teamers on whom they still had to depend to 
carry the oil from the wells to the nearest station. 
According to the length of the haul, the cost of 
teaming ordinarily ranged as high as three or four 
dollars for a load of a half dozen barrels, and not 

87 



THE STORY OF OIL 

infrequently the prices were shaped to take unfair 
advantages of a shipper's necessities. The whole 
system was no longer suited to the magnitude of 
the petroleum interests. The new conditions of 
heavy production made it imperative to find some 
way of handling large quantities cheaply, more 
cheaply, in fact, than even the railroads could do it. 
Ingenious minds were beginning to wonder why 
the oil could not he pumped through pipes extend- 
ing from the wells to the shipping points just as 
easily as it was pumped through pipes from the 
wells into storage tanks. As early as 1860, Genera] 
Karns, of Parkersburg, West Virginia, had pro- 
posed laying a, line of six-ineh pipe from Burning 
Springs to the Ohio River, a distance of about 
thirty-six miles, and letting the oil flow by gravity, 
but for some unknown reason the pipe was never 
laid and the idea was dropped. Two years later a. 
bill to authorize the construction of a pipe line 
from Oil Creek to Kittanning was defeated in the 
Pennsylvania legislature through the vigorous lob- 
bying of tin 1 important teaming interests in the 

oil regions. The same yea?*, 1862, a man named 

Hutchinson constructed a small private line on 
the siphon principle to carry oil over a hill from 
his well to a local refinery, but the excessive loss 
by leakage at the joints of the pipe made it n- 
sary to abandon the attempt. In 1865, however, 
Samuel Van Syckle built a successful line from 
the United States well at Pithole to Miller's Farm. 
on the Oil Creek railroad. He overcame the old 

88 



THE EVOLUTION OF BULK CARRIER- 

trouble from leakage by using carefully fitted 
screw sockets at the joints of the different sections 
of pipe. This first line was made of two-inch pipe 
laid on top of the ground, with three pumping 
engines stationed along its course of about five 
miles. Its capacity was limited to about eighty 
barrels an hour, but even that comparatively small 
quantity was equal to the work of about 300 teams 
working ten hours a day. 

Immediately there was a great uproar in the 
region. The hundreds of teamers and the owners 
of teams saw at once that this new method of trans- 
portation, if allowed to live, was sure to deprive 
them of the profitable business which they had 
monopolized for five years. They also found ready 
sympathy outside of their own ranks, since the 
teamsters and boatmen made up a large proportion 
of the population, and every tradesman and mer- 
chant had to look to them for much of his profits. 
Everything possible was done to injure Van 
Syckle's line. The pipes were cut; storage tanks 
connected with the line were set on fire ; and all 
associated with it received threats of personal vio- 
lence unless pumping was discontinued. So seri- 
ous was the trouble that armed patrols had to be 
employed to protect the pipes, and the arrest of a 
number of ringleaders was necessary before the 
disturbance could be stopped. 

The pumping of oil offered such a vast improve- 
ment over the old practice of teaming that even the 
most hostile opponents were eventually forced to 

89 



THE STORY OF OIL 

admit its unquestioned advantages. Yet the growth 
of pipe lines was surprisingly slow at first, lines 
being laid only from the wells to the local refineries 
and to the main shipping points on the railroads. 
The first real trunk line of pipe did not come un- 
til 1875, when a six-inch pipe was laid from the 




A Main Pipe Line. 



lower oil field of Butler County to Pittsburg, a dis- 
tance of about forty miles. The oil men, however, 
were becoming more and more impressed with the 
possibilities of pipe-line transportation. Enthu- 
siastic (^nes believed that there was no limit to 
the distance which oil might be pumped and. in 
the same year which witnessed the opening of the 

90 



THE EVOLUTION OF BULK CARRIERS 

trunk line to Pittsburg, the Pennsylvania Trans- 
portation Company was chartered to build a line 
to the seaboard, over 300 miles away. The na- 
ture of this project shows the growing trend of 
opinion, even though its only result was the con- 
struction of various new local lines in the oil 
regions. 

A full dozen years after Van Syckle's first suc- 
cess, the railroads were still the important long- 
distance carriers, with the pipe lines acting as local 
feeders. Various traffic agreements existing at that 
time between the refining interests, the most impor- 
tant of which was the Standard Oil Company, and 
the leading railroads tended to perpetuate this con- 
dition. The railroads, on the one hand, struggling 
for their very existence, were naturally unwilling 
to lose their valuable oil traffic, and the Standard, 
on the other hand, still engaged in crushing its 
rivals, found its most powerful weapon of offense 
in the secret favors obtained from the railroads. 

The most significant event in this struggle for 
existence was probably the building of the Tide- 
water Pipe Line in the late seventies, from Brad- 
ford County to Williamsport, Pennsylvania. It 
was built by an independent company to afford an 
outlet not controlled by the Standard and its rail- 
road allies, the connection with the seaboard being 
made at Williamsport through the Reading Rail- 
road, which was not a party to any of the secret 
rates agreements. The chief service of the Tide- 
water line, however, was not in reducing rates nor 

91 



THE STORY OF OIL 

in relieving temporarily the heavy burden of op- 
pression from which many a small operator suf- 
fered. It rendered a much greater service in dem- 
onstrating the absolute feasibility of piping oil for 
long distances across any kind of country. 

From that time on, the extension of the pipe-line 
system was one of the most remarkable develop- 
ments in the whole growth of the industry. The 
first complete line- to the coast was opened in 1879 
from Olean, New York, to the refineries al Bay- 
onne, X. J. Other trunk lines were soon con- 
structed to all the important refining and shipping 
centers on the Beahoard mid en the Greal Lakes, 
-iii<1 the railroads were rapidly forced out of the 
business of carrying crude oil. 

Pipe lines have been practically the only means 
used in transporting crude oil since the early 
eighties. Wherever the industry has spread, the 
pipe line has followed it, keeping pace with its 
growth, until now thousands of miles of pipe make 
a complete network throughout the fields, connect- 
ing wells to storage tanks and tanks with the great 
trunk lines to the important refineries. Time and 
again this extension of the pipe-line business has 
been marked by fierce wars of competition be- 
tween the Standard interests and rival independ- 
ent companies, and in the eastern part of the conn- 
try, with but a single important exception, the 
Standard has always been the victor. Some idea 
of the development of pipe-line transportation 
may be had from the fact that it is now possible to 

92 



THE EVOLUTION OF BULK CARRIERS 

pump oil from the remotest parts of the Oklahoma 
fields, by way of Whiting, Intl., direct to any one 
of the great refineries along the Atlantic coast, the 
oil following a continuous line of the Standard 
pipes from the time it leaves the well until it enters 
the still at New York, Philadelphia, or Baltimore. 
In the Appalachian region alone, acting merely as 
feeders to its great trunk system, the Standard 
Company owns pipes enough to belt the earth. 

The local lines, serving to collect oil from the 
wells, and deliver it into the storage tanks, are 
usually of small pipe, ranging from two to four 
inches in diameter, and are often laid directly on 
the surface of the ground. The trunk lines are 
usually underground, and consist of a special 
wrought-iron pipe six to twelve inches in diameter. 
Relay pumping stations are placed along the lines 
at intervals varying with the character of the 
country traversed. For example, on the southern 
pipe line from Morgantown, W. Va., to Baltimore, 
the first part of the route is mountainous, which 
means lifting the oil over many elevations. There 
the pumping stations are about thirty miles apart. 
At the eastern end, where the country is flat and 
practically no lifting is necessary, the interval be- 
tween stations is twice as great. 

The pumping station is the gateway through 
which the crude oil finds its way from the well out 
to the world. Each station is equipped with two 
or more tanks, like giant cheeseboxes, holding from 
30,000 to 50,000 barrels; one tank receives oil 

93 



THE STORY OF OIL 

while it is being pumped out of the other, so that 
the stream of oil through the pipes aeied Dever 
cease. Powerful triple-expansion pumps capable 

of driving 35,000 barrels of oil a day easily 




THE EVOLUTION OF BULK CARRIERS 

overcome the friction of the heavy oil as it flows 
through the pipe. A modern station, including 
the tanks, costs not less than $75,000, and a trunk 
line of eight-inch pipe costs about $5,000 to $6,000 
a mile, hence extensive pipe-line transportation is 
clearly a business for large capital only. 

The difficulties of transporting oil by the mod- 
ern pipe line are comparatively few, except in the 
case of some especially heavy oils, such as those 
found in California. The chief trouble encoun- 
tered in the case of ordinary petroleum is the 
gradual choking of the pipes with accumulations 
of solid deposits and impurities from the oil. The 
cleaning of the pipes, however, is done quite easily 
by an ingenious device known as the "go devil." 
It is essentially a spindle so constructed that the 
current of oil forces it through the pipe, and at 
the same time causes it to rotate rapidly, a system 
of sharp blades scraping the sides of the pipe clean 
as it is sent whirling along from station to station. 

The introduction and extension of pipe lines 
revolutionized, to a large degree, the whole aspect 
of the industry. The most important of these 
changes was in shifting the base of refining opera- 
tions. For nearly twenty years after the industry 
began, the crude oil was refined mainly in the 
neighborhood of the wells, and only the valuable 
products were shipped any great distance. Out- 
side the oil regions, the refineries were confined 
largely to the leading commercial centers, as New 
York, Philadelphia, Baltimore, Cleveland, and 

95 



THE STORY OF OIL 

Pittsburg, where good railroad facilities combined 
important local markets with easy access to out- 
side districts. 

The completion of trunk lines, together with the 
rapidly growing export trade, allowed the seaport 
refineries to expand rapidly. Refining establish- 
ments in the remote oil regions, were placed at a 
great disadvantage, or could not compete at all. 
Plant after plant was absorbed by the Standard 
interests, operations were discontinued, and many 
of the refineries sooner <>r later were destroyed by 
fire. Only a comparatively few smaller concerns 
were left when the transformation ended in the 
early eighties. Prom that time on. an ever-increas- 
ing proportion of the refining business has been 
concentrated in the extensive plants located where 
the two chief conditions of profitable operation are 
found— namely, large demands for local consump- 
tion and ease of shipment elsewhere. 

Pipe lines have never been used to any impor- 
tant extent for the handling of refined oils, mainly 
because that method of transportation to any great 
distance is more economical than shipment by rail 
only when enormous quantities are to he earned 
daily, as in supplying big refineries with the crude 
oil from the wells. For this reason it is preferable 
to pipe the crude to the large consuming centers, 
refine there', and then distribute the products by 
other means. 

Next to its influence on the location of the refin- 
ing industry, the most important effect of the mod- 

96 



THE EVOLUTION OF BULK CARRIERS 

ern pipe-line system has been on the producers' side 
in the storage of oil. The early operators had to 
store their own oil as it came from the well, usu- 
ally in wooden tanks holding a few hundred to 
a thousand gallons. Fires were frequent, and, 
though making grand spectacles to witness, the an- 
nual losses frequently mounted up into the hun- 
dreds of thousands of barrels. Hardly a thunder- 
storm passed over the oil regions without leaving 
in its path one or more flaming tanks, and general 
conflagrations were not infrequent. Now the pro- 
ducer pumps from his well to a receiving tank and 
sells direct from that tank, as fast as it is filled, 
to the pipe-line company, which usually means to 
the Standard Oil. The oil in the tank is meas- 
ured, the valves connecting with the trunk pipe 
lines are opened, and the producer receives a 
voucher stating the quantity of oil taken. The oil 
so disposed of is then just as good as a bank ac- 
count, so-called "pipe-line certificates" being is- 
sued against it in much the same w r ay as a bank 
depositor may check out his account. 

Storage is, of course, still necessary, because the 
production frequently exceeds the capacity of the 
refineries and the demands of the market. But 
the storage is done chiefly in enormous tank farms 
owned by the big oil companies, with the Standard 
naturally as the most important. Huge boiler- 
iron tanks, nearly a hundred feet in diameter, and 
thirty feet high, holding about 35,000 barrels, are 
the usual type now adopted. A single farm often 
8 97 



THE STORY OF OIL 

contains two or three scores of such tanks, with 
the storage capacity ranging up to millions of bar- 
rels. In this way the surplus production is readily 
taken care of, without hindering any operator from 
■ producing as fast as possible in order to keep his 
neighbors from getting more than their share. 

The unqualified success of the pipe-line system 
in the United States has Led to its introduction into 
every important oil field in the world. The Baku 
operators; quick to profit by any American succ< 
introduced pipe lines from the wells to the refin- 
eries about 1879, and. curiously enough, went 
through practically the same kind of struggle with 
the native teamsters as marked the Laying of the 

first, line in this country. In the same way in 

Galicia and Roumania, in Japan, in Burma, and in 

the Dutch Kast Indies the pipe line has begun to 
replace the primitive methods of handling, and has 
put the industry on a modern basis. 

The production of petroleum in this country lias 
always been greater than the demands of home 
consumption, so that for many years much of the 
supply has been forced to seek a market in foreign 
countries. As the foreign shipments grew, the 
methods of over-sea carriage began to be fully as 
important as the other branches of the transporta- 
tion system. Shipments abroad for several years 
after export trade began, were all made in barrels, 
under even greater disadvantages than were en- 
tailed by the use of barrels at home. 

Bulk shipments had solved the problems of <lo- 
98 



THE EVOLUTION OF BULK CARRIERS 

mestic transportation. It was, therefore, entirely 
logical to argue that it would serve the same 
purpose in the export trade. If bulk barges could 




A Tank Steamer for Bulk Oil and a Lighter for Wax 
or Oil in Barrels. 

be operated on the Allegheny River, there was no 
apparent reason why the same thing could not be 
done on a larger scale in the trade with Europe. 
About 1870 several wooden sailing vessels, fitted 
with tanks in their holds, had been tried in the 

99 



THE STORY OF OIL 

trade between this country and European ports, 
but with only partial success. In 1872 the steamer 
Vaterland was specially constructed to carry bulk 
cargoes of petroleum, but the fear that the presence 
of oil in the hold would interfere with the passen- 
ger traffic prevented the tanks ever being usv(\. 

Finally, about 1ST!), several sailing vessels, built 
for the trade, successfully carried cargoes of oil in 
bulk to Continental ports, and marked the begin- 
ning of a new era in the marine transportation of 
petroleum, oilier similar vessels soon Followed, 

and before long tank steamers were also added to 
the fleet of bulk carriers. The problem of securing 
crews, however, was For a time a serious obstacle 
to the success of the steamers. Sailors, in general, 
regarded it as suicidal to ship on a vessel where 

oil and fire were companions, and many a sailor 

was taken aboard with his senses dulled by poor 

whisky. There was some reason for this aversion 
to the tank steamer, il is true, for fires were Pre 
quent, both in port and on the high sea. and occa- 
sionally a vessel left port with a cargo of oil never 
to be heard from again. 

As in the case of the early pipe lines, the advan- 
tages of bulk transportation by water were far too 
great for any obstacle to remain long in its way. 
Imperfections in constructing the vessels were 
remedied, improvements were adopted, and one 
change after another led to the evolution of the 
modern steel "tanker," divided into separate com- 
partments by sets of longitudinal and transverse 

100 



THE EVOLUTION OF BULK CARRIERS 

bulkheads. Steamers, safeguarded by modern pre- 
cautions, now carry millions of gallons of oil with 
little more danger of fire than in the case of other 
cargoes. Considerable care is, of course, required 
concerning the nature of the lights on board the 
vessel, the use of matches, and smoking among the 



L 


/ 1 






J 




- x 


hsM\ 


-^ 


/ L- 






^^^Hl 


\ 



Loading a Bulk Steamer. 



crew, particularly when receiving or discharging 
cargo, and when cleaning the tanks ; but the same 
thing is more or less true of any kind of combus- 
tible cargo. 

The tank vessel is unquestionably one of the most 
important inventions in the whole history of petro- 
leum, for it alone has made it possible for Ameri- 

101 



THE STORY OF OIL 

can oils to compete in much of the world's trade 
against oil from other countries. Nowadays, 
soon as a tanker nears port, word is sent to the 
refinery, and by the time the vessel is tied up at 
the dock the cargo of oil is all ready to be taken 
on board. Powerful pumps are started, and, while 
provisions and supplies for the voyage are being 
secured, the tanks are filled. Half a day suflft 
to put aboard a cargo thai would have taken a big 
gang of men a week to stow in the days of 
shipment by barrel on the slow sailing vessels. 
Thirty years ago hulk carriage ^y sea was still 
in the experimental stage. Now hundreds of \ 
sels of r\rvy description, hailing from all coun- 
tries, are carrying cargoes in hulk to every corner 
of the world; steamers, sailing vessels, and barg 
transporting millions of barrels of oil annu- 
ally. A multitude of stevedores and coopers have 
lost a profitable employment, hut the advantag 
to the petroleum industry have been beyond 
measure. 

The hist link in the transportation of oil is the 
distribution of refined products to the consumer. 
Here again the idea of handling in hulk has been 
adopted quite generally both in this country and 
abroad. The tank car on the railroads, the chief 

carrier of crude oil forty years ago, is now devoted 
almost entirely to the shipment of the refined 
products, an up-to-date cylinder tank having a ca- 
pacity of 6,000 to 8,000 gallons. The same econo- 
mies of handling apply to the tank car as to the 

102 



THE EVOLUTION OF BULK CARRIERS 

tank steamer, a modern "loading rack" making it 
possible to fill a train of twenty cars in an hour. 
This rack consists merely of a pipe line from the 
storage tanks laid alongside the railroad tracks, 
with vertical branches rising up at intervals equal 
to the length of a tank car. Each branch pipe has 




****»^%^ 




Burros Loaded with Case Oil on the Main Trail to Fez. 

its own valve and an adjustable pipe long enough 
to reach the manhole of the car as it stands on the 
track. In this way one car or a score of cars can 
be loaded by pumping directly from the tanks 
where the refined oil has been stored. 

In tank cars, and by tank vessels in the case of 
seaboard cities, the oil is carried from the main re- 

103 



THE STORY OF OIL 

fineries at New York, Philadelphia, Baltimore, 
Whiting, etc., to distributing points, scattered 
throughout the country. Tank wagons, carrying 
from 250 to 1,000 gallons, form the connecting 
links between the tank station and the retail dealer 
or the consumer. This wagon delivery of illumi- 
nating oils lias been so generally adopted of late 
years in this country that practically every town 
having 2,000 inhabitants is now included in the 
system. 

The plan of hulk delivery direct to the consumer 
lias been extended enormously by American opera- 
tors in recent years, until now their oil sold far 
away in the plains of India, or the interior of 
China may never have been in a package at any 

Stage of its journey since leaving the oil well. 
Thousands of native boats of all sizes and descrip- 
tions carry oil in hulk or in cases t<» the headwaters 
of every important river in the Orient. Native 
hawkers pushing their small tanks far into the in- 
terior spread the limits of bulk shipment almost 
to the very doors of the greal deserts <>f Central 

Asia. Tank stations and central distributing 
points for bulk oil now dot these countries of the 
far east, and appeal* as startling reminders of the 
tremendous extension of modern western ideas and 
methods. 

The "case oil" trade is an important special 
phase of the distributing system. In many ways 
it forms the most picturesque side of the whole in- 
dustry, and most strikingly illustrates the extent 

104* 






THE EVOLUTION OF BULK CARRIERS 

to which the oil trade lias surmounted every ob- 
stacle. Shipments of illuminating oil for many 
Oriental districts, for Africa, Latin America, in 
fact, for any region where local transportation 
facilities are not good, are usually made in the tin 
cans or cases holding from two to five gallons each. 
Oil in this form can be carried readily by coolie 




Native Boat Carrying Case Oil up the Hoogly River, India. 



porters, or on pack animals, under conditions 
where any other form of shipment is impossible, 
and yet where important markets exist. In the 
rugged parts of the West Indies, Central and 
South America, the patient Spanish burro takes 
case oil to the interior villages, plantations and 
mines. Donkey trains and caravans of camels re- 
ceiving oil at the seacoast or along the Nile supply 

105 



THE STORY OF OIL 

the desert dwellers of Egypt and Northern Africa. 

Even in the wildest parts of the Sahara or the Sou 
dan the explorer finds the inevitable tin case which 
once held American oil, the last outlying link in a 
wonderfully perfect and elaborate system. 






CHAPTER VII 

THE PROCESSES OF REFINING CRUDE PETROLEUM 

The enormous supplies of petroleum in this 
country never had any great industrial value until 
some method of purification or refining was in- 
vented. The early attempts to use the crude oil for 
domestic lighting purposes in various places were 
invariably unsuccessful, on account of the sooty, 
smoking flame, and the extremely disagreeable, 
nauseous odor. Use as an illuminant was the only 
avenue of development which seemed to offer any 
real possibilities, but it was absolutely necessary 
that the quality of the oil should be improved by 
the removal of these objectionable features, if its 
use were to become general. 

Purification of petroleum was done in a rough 
way many years before the modern process was 
perfected, but never on a very important scale. 
The medicinal oils used in European countries two 
centuries ago were generally subjected to some 
process of distillation or filtration. Refined illu- 
minating oil from the Galician districts was intro- 
duced in the early part of the last century, and 
soon after that time filtering through charcoal was 

107 



THE STORY OF OIL 






tried in this country to remove the odor and im- 
prove the general appearance of the crude oil. 
The first important refining plant in the world, 
however, was probably erected in the Baku dis- 
trict about 1823. It consisted of an iron still 
having a capacity of forty buckets, and said to 
give about sixteen buckets of so-called ' white 
naphtha" from each charge. This refined oil 
found a ready sale at the great Russian fair at 
Nishni Novgorod, presumably to be used in 

lamps. 

Petroleum refining in this country began in a 
small way aboul 1855, with Kier's experiments to 
turn his medicinal oil to some more valuable use. 
The manu facture of BO-called "paraffine oils" 
Erom CO al and shale had increased so rapidly in the 
decade following 1850 thai there were Borne fifty 
«„• sixty establishments in the eastern pari oJ the 
United States when Drake's well was opened. 
Kier's results had already shown clearly enough 
that paraffine oils could be secured more easily 
from petroleum than from coal or sl.alc and more 
cheaply also if the supply of petroleum w< 
large enough. The prospcd of securing petro- 
leum in large quantities by following Drake's ex- 
example made the entire shale oil industry totter. 
The owners of the refineries, many of which were 
then only fairly started, saw themselves facing 
ruin, until a simple and easy salvation appeared in 
converting their plants into petroleum refineries. 
Thus, the latter industry was able to profit mime- 

108 



REFINING CRUDE PETROLEUM 

diately from the existence of this large number of 
ready-made establishments. 

Kier's first attempts at refining petroleum had 
given him a " carbon oil" distillate, distinctly su- 
perior to the crude oil, but far from being perfect. 
The strong odor still persisted and brought a storm 
of complaints from the consumers. General dissat- 
isfaction was expressed also on account of the 
rapidity with which the oil turned black, and on 
account of the formation of a hard crust on the 
wick which interfered with the free burning of the 
flame. As a result the "carbon oil" gained favor 
slowly, despite the fact that an army of canvassers 
and selling agents spread over the country to boom 
its use. Something had to be done to place petro- 
leum oil on as satisfactory a basis as were the shale 
and coal oils. Distillation alone would evidently 
never suffice. Chemical treatment to purify the 
products after distillation was tried and soon dem- 
onstrated that successive manipulations with solu- 
tions of alkali and acid would remove the chief ob- 
jectionable features. These improvements, already 
familiar abroad, had been introduced here about 
the time Drake went to the oil regions. Therefore, 
as soon as his well was struck, the refining of petro- 
leum was in a condition to expand and drive the 
shale-oil industry out of existence in short order. 

The most important process in the refining of 
petroleum, as it is carried on to-day, consists essen- 
tially of two parts : first, heating the oil in a still 
until it vaporizes in the same way as boiling water 

109 



THE STORY OF OIL 

passes into steam; and second, condensing these 
vapors just as steam condenses on cold objects. 
The successful separation of the different products 
depends on the fact that each of the many com- 
pounds composing crude oil has its own particular 
boiling point, and thus allows gradual heating to 




Crude Stills. 

carry on Ihe process of division, or fractional dis- 
tillation, as it is called. The stills where the crude 

oil is heated, the condensers where the Vapors of 

successive divisions are returned to the liquid form, 

and the tanks for storing the refined products, 
therefore, represent the important parts of the 
skeleton of every refinery. 

The early refineries were mainly small plants 

110 



REFINING CRUDE PETROLEUM 

with a few vertical iron stills resembling giant 
cheese boxes, and having a capacity of twenty-five 
to seventy-five barrels each. As the industry ex- 
panded, however, and made constantly increasing 
demands on the capacity of the refineries, larger 
and larger stills were introduced. A horizontal 
cylinder still was found to offer various advan- 
tages over the old cheese-box style, and the cylin- 
der form, with a capacity of about 600 barrels, is 
the type now generally used in this country. 

Each still may have its own condenser, or sev- 
eral stills may be connected with a common con- 
denser, although the former arrangement is pref- 
erable. In either case the condenser is the same, 
consisting of coils of three- or four-inch pipe sev- 
eral hundred feet long, and ordinarily kept cool 
by thousands of gallons of water pumped over 
them daily. The hot vapors entering, the con- 
denser from the still come in contact with the cold 
pipe and return to liquid form, in the same way 
as steam on a winter day will collect on the cold 
glass of a window and trickle down the pane in tiny 
streams of water. The refined product of a dozen 
condensers may be turned into a single receiving 
tank until the limit of its capacity is reached, and 
then other similar tanks are pressed into service. 

Between the condenser and the receiving tanks, 
the distilled oil has to pass through the stillhouse 
and undergo the keen scrutiny of the stillman, on 
whose skill the success of the entire process de- 
pends. The condensed distillates make their en- 

111 



THE STORY OF OIL 

trance to the stillhouse through a Y-shaped tube, 
such as are commonly inserted in drain pipes to 
prevent the passage of sewer gas, and which serves 
much the same purpose here. A vertical pipe on the 
condenser side of the V allows the uncondensable 
gases from the still, that is, those vapors which will 
condense only at very low temperature, either to 
escape into the air or to be led away to be burned 
under the still from which they came. The con- 
densed distillate, now in the liquid form again, 
passes through the V tube and enters the stillhouse 
in what is ended the separating box, a triangular, 
east-iron affair. A glass door on one side of the box 
enables the stillman to watch both the color of the 
oil and the size of the stream as it niters the hox. 

In this way. from the knowledge of long experience, 

he knows how to regulate his fires under the stills, 
and from occasional samples of the distillate he can 
determine when a different grade of oil has begun 
to vaporize in the still and is coming through the 
condenser. Shutting one valve and opening an- 
other close at hand turns the stream into a differ- 
ent receiving tank. So the process goes as long 
as separation is possible, or until some special re- 
quirements make it desirable to stop the distilla- 
tion at a certain point. 

The actual process of distillation consists in 
carefully separating the different hydrocarbon 
compounds which make up the crude petroleum. 
These ''fractions. " as the different compounds are 
called, are determined more or less arhitrarily by 

112 




The Stillman. 



THE STORY OF OIL 

their weight as compared with an equal bulk of 
water, and by the ease with which they give off 
inflammable vapors. 

Distillation may be done by what is known as 
the intermittent process, in which the major part 
of the operation is carried on in one still heated to 
successively higher temperatures by gradually in- 
creasing the fires beneath it. This method is most 
commonly used in the United States. Distillation 
may also be done by the continuous process, in 
which the crude oil is pumped through a seri 
stills, each succeeding one being heated to a oon- 

stant temperature higher than that of the one pre- 
ceding: 

Iii the intermittent process, the crude oil in the 
still is subjected to a gradually increasing tempera- 
ture, so that the different fractions pass off to the 
condenser in the order of their volatility. The 

lighter and more volatile compounds, thai is. those 
boiling at low temperatures, are vaporized first, 
the heavy, less volatile compounds not appearing 
until the highest temperatures are reached. Dif- 
ferent petroleums vary so widely in character, and 
the number of possible products is so large that 
each kind requires special treatment to secure the 
particular products for which it is best adapted. 
The distilling business, therefore, becomes decid- 
edly intricate when examined in detail, and a high 
degree of skill must be exercised in manipulating 
the process so that it will yield the largesl quantity 
and best quality of the valuable oils. 

114 



REFINING CRUDE PETROLEUM 

The general character of the treatment can be 
shown by comparing the two common processes 
known as "running to tar" and "running to cyl- 
inder stock." The main difference between these 
two processes is that the former gives the largest 
possible yield of illuminating oils and a small yield 
of heavier products for lubricating. The second 
process is intended to yield a maximum amount 
of the lubricating oils, with the illuminating oils 
of secondary consideration. In general, therefore, 
one process is the direct reverse of the other in so 
far as its chief object in view is concerned. 

Both processes start with crude oil heated in the 
still, and the vapors passing off into the condenser. 
The most volatile of these vapors begin to appear 
before much of any heat is applied to the still. 
They can be condensed only by special processes at 
temperatures near the freezing point, consequently 
in the ordinary course of distillation they pass off 
into the air through the escape pipe from the con- 
denser or are led under the still to serve as fuel. 
The first distillate which condenses and passes 
through the V tube to the stillhouse is a clear, 
colorless light oil, but, as the process goes on, the 
stream of oil entering the separating box becomes 
heavier, and the color gradually changes through 
yellow to darker shades. The stillman tests the 
density of the oil from time to time, and on the 
basis of these tests and the color, he turns the 
stream into different tanks, by simply closing and 
opening convenient valves. 

115 



THE STORY OF OIL 

The stream passing through the separating box 

is continuous as long as the still contains any oil 
which can be vaporized, hence the stillman's divi- 
sions of the stream of distillates, or his " cuts," aa 
they are called, are an exceedingly important pari 
of the process. The first cut is usually made when 
oils of the naphtha class cense to appear. The 
second cut is the illuminating oil. In the ''run- 
ning to tar* 1 process, the method known as "crack- 
ing " is employed after about two thirds of the 
cut o!' illuminating oil has passed over, its object 
being to increase the proportion of illuminating 
oils obtained. 

The exact changes which take place in the still 
during this "cracking" process are only partly un 
dersto<>d. The process was discovered accidentally 
iu 1861 by a stillman at Newark, X. J., who left his 
post one day after about half the contents had 
passed off, building a strong fire under the still 
to last until he returned, as he expected, a half 
hour later. Several hours elapsed, however, before 
he did return, and then, to his amazement, 
he found issuing from the condenser a lighter 
distillate than was being obtained when he left, 
whereas it should normally have been much 
heavier. Such an entirely unheard-of thing led 
immediately to experiments, in which it was found 
that a portion of the heavy distillate, normally com- 
ing through the condense]- Inst, had condensed on 
the cooler upper portion of the still, and dropping 
back onto the highly heated liquid had encountered 

116 



REFINING CRUDE PETROLEUM 

a temperature hot enough to cause decomposition 
of some sort, so that a lighter oil was the final re- 
sult. Many different devices have been invented to 
aid in this cracking process, and, though some re- 
fineries use it but little, cracking has been of enor- 
mous benefit in the case of certain petroleums, 
naturally yielding only a small percentage of kero- 
sene, yet rich in the grades heavier than kerosene, 
and not heavy enough to be high quality lub- 
ricating oils. By cracking many of these inter- 
mediate grades are broken up, and become valuable 
illuminating oil. 

After cracking has given as much kerosene as can 
be secured the fires are checked, and the tar process 
stops so far as the first still is concerned. A cer- 
tain amount of thick residue or "tar" always re- 
mains in the still and must be removed before the 
still can receive another charge of crude oil. This 
tar usually goes to a second still, where further dis- 
tillation gives lubricating oils, paraffin wax, and 
coke. The cuts of naphtha and illuminating oils 
are also either redistilled or subjected to further 
treatment to purify them and separate them into 
different commercial grades. 

The process known as ''running to cylinder 
stock" is essentially the same as the other up to the 
point where cracking would begin, except that it 
is usually applied to crude oils naturally adapted 
to the manufacture of lubricants. The important 
difference consists in heating the still by free super- 
heated steam within, as well as by the usual fire 

117 



THE STORY OF OIL 

underneath the still. The presence of the steam 
causes a more even distribution of the heat, and 
more completely vaporizes the volatile lighter oils 
from the whole charge without having to subject 
it to such a high temperature. When the distillate 
in this process appears too heavy for kerosene, in- 
stead of the cracking treatment, a third cut, known 
as the "wax slop/' is often made. Different 
methods of handling this cut yield special brands 
of oil Tor a great variety of purposes, from the 
headlight oil of locomotives to the thin "spindle 
oils" used to lubricate lighl machinery. The en- 
tire elimination of the cracking process lea\ 
greater residue in the still after the "wax slop" 

cut is made and this residue, known as "cylinder 
stock," Forms the basis for the manufacture of a 
host of lubrical ing oils. 

The Russian process of continuous distillation 
differs from the American method only in using a 
series of a dozen or more stills, each of which is 
heated to a definite steady temperature. The crude 
oil passing from one still to another encounters 
these successively higher temperatures, which cor- 
respond to the boiling points of the different petro- 
leum products. Each still constantly gives off a 
distillate of uniform character, while the series 
of stills gives the same range of distillates as 
are obtained by the gradual application of in- 
creased heat in the intermittent system. The pos- 
sibility of supplying the crude oil to the stills as 
fast as the distillates pass off results in important 

118 



REFINING CRUDE PETROLEUM 

economies of time, less waste of fuel, and a mini- 
mum of injury to the plant by avoiding the cool- 
ing and reheating of the still. This process, how- 
ever, is not well adapted to American conditions 
because of differences in the nature of the crude 
oils, and in the products most desired. The Ameri- 
can refiner, in general, aims to produce as much 
kerosene or lubricating oils as possible, w T hereas in 
Russia the enormous demand for the residuum, or 
astatki for fuel, makes it nearly as valuable as 
any other product. There is, therefore, little in- 
ducement to increase the yield of kerosene and 
reduce the quantity of residuum by employing the 
cracking process, which can be done only in inter- 
mittent distillation. 

The first distillatevS obtained from the crude oil 
by either process usually have to be redistilled or 
purified before they can be used. Any sulphur 
which is present must be removed either in the first 
process or subsequently. One method makes use of 
copper oxide in the first condenser, or in a specially 
constructed still, the sulphur by chemical union 
being removed in the form of a copper sulphide, 
from which the copper can be reclaimed and used 
over and over. Another method makes the separa- 
tion by treating the distillates successively with 
sulphuric acid, caustic soda, and litharge in agita- 
tor tanks built for the purpose, the removal in this 
case being in the form of a sulphide of lead. This 
treatment for sulphur is one of the most important 
and yet most troublesome processes of all, since the 

119 



THE STORY OF OIL 

presence of a very small percentage of sulphur im- 
parts a highly disagreeable odor to any distillate. 
No product can be sold until the last trace of sul- 
phur has been removed. 




Agitators. 



The naphtha distillate, where obtained in impor- 
tant quantities, may be roughly separated into dif- 
ferent grades, or cuts, known as gasoline, commer- 
cial naphtha, and benzine. When Hie division is 
made by the stillman, as they come from the 

120 



REFINING CRUDE PETROLEUM 

condenser, washing with acid, water, caustic soda, 
and water again, in the metal agitators, to 
purify and deodorize is the only further treat- 
ment necessary before they are ready for ship- 
ment. More often, however, all the naphtha dis- 
tillate goes into a single cut as it comes from the 
condenser, is subjected as a whole to the deodoriz- 
ing and purifying treatment and is then redis- 
tilled and divided into the three fractions men- 
tioned above. This redistillation of the naphtha is 
done in a special still heated by steam, and with 
the outlet, through which the vapors reach the 
condenser, rising for some distance before it actu- 
ally enters the condenser coil. This arrangement 
is introduced to prevent any liquid from being car- 
ried over into the condenser with the gas. The 
condenser for the naphtha, still also differs from 
the others in having two coils of pipe, the first of 
which has a "back trap," or pipe leading back to 
the still, so that any heavier oils present, con- 
densing quickly, will be returned to the still. The 
main body of the naphtha distillate is condensed 
in the second coil of pipe, and is cut into standard 
grades by the usual separating-box method, but, in 
order to secure the very lightest of the products, 
it is necessary to use a third coil surrounded by a 
freezing mixture of salt and ice. The different 
cuts obtained from this distillation are immedi- 
ately ready for use as soon as tested to prove their 
quality. 

The distillate of illuminating oil, or kerosene, as 
121 



THE STORY OF OIL 

we know it, if used just as it comes from the orig- 
inal still, has all the disadvantages which Kier's 
"carbon oil" presented, charring the wicks, giv- 
ing off an unpleasant odor, and rapidly turning to 
a dark color after standing, all owing to the pn 
ence of various impurities. The illuminating 
"cut," therefore, is given the same sort of purifi- 
cation treatment as is applied to the naphtha. 
Testing and grading for sale then complete the 
last stages in the production of kerosene. 

The manufacture of lubricating oils, and pal- 
atini or wax complete the principal processes of 
refining. Sonic lubricating oils are produced by 
the processes known as sunning or reducing, de- 
pending on the evaporation of the lighter products 
either by exposing the crude in open tanks or by 
gently heating it with steam. This method of treat- 
ment, is said to have originated from the observa- 
tion that certain oils spilled on the streams of the 

oil regions were thickened by evaporation, and be- 
came tit for Lubricating purposes without further 
treatment. Experiments with different oils showed 
the possibility of making natural lubricators in 
this way from special grades of crude petroleum. 
So-called "sunned oils" and "reduced oils" are 
still to be found on the market, but by far the 
greater proportion of machine oils are products of 
distillation. 

These refined lubricating oils come either from 
the process of "running to cylinder stock," or 
from the redistillation of the "wax slop," and of 

122 



REFINING CRUDE PETROLEUM 

the tar left in the still after cracking for kerosene 
is completed. These oils, in one way or another, 
form the basis of all grades of machine oil from 
the very lightest "spindle oil" to the heaviest 
grease. The processes of treatment differ only in 



1, 1 1 

UjUt 


1 


Efi; '*'.'" Mfc^^t^^^^^ 


^ j9%^S^ ^B"iPI 


^5^* - i ^^^^JK/ 





Settling Tanks for the Removal of Water and Other 
Impurities. 

minor details from those used for the lighter oils. 
Different cuts are made, and these cuts, together 
with varying methods of purification, bleaching 
and filtering, determine the particular grade pro- 
duced. In general, however, the redistillation of 
the "wax slop" cut yields the major portion of the 

123 



THE STORY OF OIL 

light and especially high-grade lubricating oils, 
while the heavier grades come from the cylinder 
stock. 

Paraffin was once regarded merely as a by- 
product of distillation, but it is now so widely used 
in industrial processes that in some refineries it is 
fully as valuable as any of the other products. 
Paraffin is obtained from the redistillation of 
either the residuum left in the tar process after 
cracking is completed, or from the "wax slop" cut 
in the cylinder-stock process. In either ease the 
paraffin distillation is carried on in heavy steel 
stills at very high temperatures. The paraffin 

passes off in one long stream of distillate, the latter 
end of Which may be almost pure wax. It then un- 
dergoes the same chemical purification as the other 
products, the only difference being that the agita- 
tor must be heated to prevent cooling and solidifi- 
cation of the wax. The subsequent treatment, how- 
ever, is much more complicated, consisting of a va 
riety of steps as follows: to a settling tank where 
the water is removed; to a chilling tank wherte 
ammonia machines cause it to congeal and crystal 
lize; to a, filter press which forces out any oil re- 
maining, and leaves only solid paraffin; to the 
melting tank to be converted into liquid paraffin 
again; to the bone-black filter where all color im- 
purities are removed; and, finally, to the second 
chilling tank, where it is returned to the crystal- 
lized form ready for the hydraulic presses, which 
convert it into cakes for shipment. 

124 



REFINING CRUDE PETROLEUM 

Prom this description it appears that only two 
of the important products of petroleum are regu- 
larly obtained directly from the first distillation; 
these are the illuminating oils and the cylinder 
stock, and both of these have to receive additional 
treatment subsequently. All other products are 
the result of a second distillation and chemical 
manipulations. The percentage of the different 
products obtained by refining varies immensely, 
depending both on the original character of the 
crude oil and on the special aims of the individual 
refiner. Illuminating oils run as high as seventy- 
five per cent, or eighty per cent., and as low as 
twenty per cent, to twenty-five per cent. Lubricat- 
ing oils vary from nothing up to twenty per cent, 
or thirty per cent., and the residuum and waste may 
be as high as thirty per cent, of the whole volume 
of crude oil. The residuum, representing the com- 
pounds which cannot be vaporized by ordinary 
means, is not, however, all loss, because, whether 
pitch, coke, or asphalt, according to the character 
of the crude oil, various methods of treatment and 
utilization are devised. Practically nothing is lost 
except moisture, solid impurities, and the varying 
amounts of uncondensed gases. Even the water 
used in washing the distillates is sent to huge set- 
tling tanks to recover any oil which may have been 
included in it. 

The most volatile of these distilled oils, the naph- 
thas, are extreme^ inflammable liquids, the gases 
from which make violently explosive combinations 

125 



THE STORY OF OIL 

when mixed with air. The presence of a xevy small 
percentage of the lighter naphtha oils in illuminat- 
ing or lubricating oils is, therefore, a constant 
source of danger. It' such oils are used explosions 
and fires arc sure to occur. The danger is espe- 
cially greal in the case of naphthas presenl in kero- 
sene: the most prolific cause of lamp accidents and 
fires in the early days of the industry. Continued 
complaints about the "deadly kerosene/' as it was 
frequently called, led to the establishment of cer- 
tain legal standards which all illuminating oils 
must meet. It has consequently become customary 
to subject all the distilled oils to standard tests in 
order to insure a uniform quality of the product. 

Testing is now fully as important a pari of the re- 
fining process as is distillation iisrlf. since it is the 
only safeguard for the inierests of both producer 
and consumer. 

The lighter oils of the naphtha group are usually 
tested for gravity, odor, and acid impurity. The 

gravity test is made with the usual Baume hydrom- 
eter, and on the basis of this test the oils are 

graded for commercial purposes as gasoline, naph- 
tha, and benzine. The test Tor odors is made by 
simply saturating ;i cloth with the nil, as the oil 
evaporates from the cloth any foreign odors are 
readily detected. The presence of acid is revealed 
by testing with litmus paper, which immediately 
turns red if the acid has not been entirely removed. 
Benzines for special purposes, as in the manufac- 
ture of paints and varnishes, also have to he \'n>i^ 

L26 



REFINING CRUDE PETROLEUM 

from any of the heavier oils. The test in this case 
is made by soaking part of a sheet of paper in the 
benzine, if heavier oil, like kerosene, is present, a 
grease spot shows as the volatile benzine rapidly 




The Lamp Test. 



evaporates; otherwise the whole sheet of paper 
presents the same appearance. 

The testing of kerosene oils is by far the most 
important of all, because the conditions under 
which it is used in ordinary lamps are especially 
favorable for the occurrence of explosions. Kero- 

127 



THE STORY OF OIL 

sene is tested for acid, sulphur, gravity, color, and 
what is known as the "fire test." Acid and grav- 
ity tests are the same as for naphthas. Color is. of 
course, determined by inspection, and furnishes 
the basis for division of the kerosene into the three 
grades common in this country : waU r white, which 
is colorless, and is the standard of American kero- 
sene; prime white, of a Taint yellow color; and 
standard or standard white, a pronounced yellow. 
In European countries other grades are recog- 
nized, as many as seven being commonly sold in 
Germany, 

The fire tests, however, are the most significant 
since they determine the safe or unsafe character 
of the kerosene and the legality of its sale. Two 
fire tests may be used, one of them called the "Hash 
test," determining the temperature at which the 
oil will give off an inflammable vapor when heated 
artificially, or when exposed naturally to the air. 
The other, known as the "burning test," deter- 
mines the temperature at which the oil will take 

fire and burn on the surface. The latter tempera- 
ture is usually from ten to forty degrees higher 
than the "flashing point," and. since the gravesl 
dangers are from the generation of explosive va- 
pors, the flash test means most. 

A great number of devices have been invented 
for making the flash test, the essential principle of 
each being a closed or open cup in which the oil 
is heated. A common form of tester consists of a 
cup holding about the same amount of oil as a me- 

128 






REFINING CRUDE PETROLEUM 

dium-sized lamp, the cup being immersed in water 
and heated carefully by heating the water, on the 
same principle as cooking in a double boiler. The 
glass cover of the cup has a hole for a thermome- 
ter and another for inserting a match to ignite the 
vapor. Kerosene, to be safe for lighting purposes, 
should have a flashing point higher than any tem- 
perature which it is likely to reach under ordinary 
conditions. In most places a flashing point of 
110° or higher is required by law. Testing, how- 
ever, usually begins as soon as the thermometer 
shows the oil to have a temperature of about 85° or 
90°, and continues at intervals of every degree or 
two until the insertion of the match causes the 
appearance of a bluish flame in the cup. As soon 
as this " flash' ' flame appears the reading of the 
thermometer indicates whether the oil is up to the 
required standard. Illuminating oils for special 
purposes, such as headlight oil for locomotives, sig- 
nal lamps, miners lamps, and so on, frequently have 
to meet much higher requirements than for or- 
dinary domestic use, but the testing process is the 
same. 

Lubricating oils are subjected to three impor- 
tant tests, viscosity, fire test, and cold test, each, in 
a way, being of vital significance in determining 
the value of the oil. The first, if any, is perhaps 
the most important since viscosity is the most nec- 
essary quality of any lubricating fluid. The test 
may be made in innumerable ways, but all depend 
on the principle of determining the length of time 
10 129 



THE STORY OF OIL 

required for a given quantity of the oil to flow 
through a small opening. The temperature at 
which the test is made depends on the special use 
for which the individual oil is intended, ranging 
up as high as 212° in the case of cylinder oils for 
steam engines. 

The fire test is necessary in the ease of most ma- 
chine and engine oils because the heat from fric- 
tion might generate inflammable vapors if xi^ry 
volatile products were present. The cold test is 
also reqjuired to determine the temperature at 

which the oil would become thick and cloudy. This 
test is made by freezing the oil in a tube, and then 

as it molts, noting the temperature at which it be- 
gins to run. High-grade lubricating oils have to 
withstand a very wide range of temperatures; first- 
quality cylinder nil, for example, must have a cold 

test as low as 55 , and it must not Hash below 

Fahrenheit. 

All these tests must he made at the refinery for 
each lot of distillates before they can be approved, 

graded, and loaded [\>v shipment to the consumer, 
If any distillate docs no1 "prove up." it has t<» go 
back for further manipulation to remedy the de- 
fects, the success or failure of the tests depending 

largely on the skill of the stillman in making his 
cuts as the distillate passes through his separating 

box. 

In spite of its many steps and intricate processes 
there is nothing picturesque 01* spectacular in pe- 
troleum refining, unless it is in the magnitude of 

130 



REFINING CRUDE PETROLEUM 

the plant and the very obscurity of the many trans- 
formations going on everywhere yet entirely un- 
seen. One refinery is essentially the same as every 
other save in size, and perhaps in a few minor de- 
tails. At a hundred refineries from the Atlantic 
to the Pacific, and from the Lakes to the Gulf, the 
same story is repeated day after day and year after 
year, as the invisible stream of oil makes its jour- 
ney step by step through the maze of pipes, stills, 
condensers, and agitators, leaving at every turn a 
part of its precious burden. On the one hand, the 
vast network of pipe lines binds the refinery to 
thousands of w r ells, scattered halfway across the 
continent. On the other hand, the world-wide dis- 
tributing system carries the multitude of refined 
products into the daily life of every class of hu- 
manity. 



CHAPTEB VIII 

PETROLEUM PRODUCTS AND THEIB Q8 

Somewhere in the vicinity of two hundred dif- 
ferent products can be obtained from petroleum, 
and the uses to which they may be put are well- 
nigh innumerable. The uses of the half-dozen chief 
products, in fact, are in themselves so varied that 
only the most important can be mentioned in the 
ordinary limit of 8 single chapter. In the whole 
realm of natural substances it would be impossible 
to find any other which rivals petroleum and its 
products in the great diversity of the needs they 
supply. 

Petroleum first became important through the il- 
luminating oil known nowadays by the familiar 
name "kerosene." 

The first kerosene, however, was not a petroleum 
product at all: it was an illuminating oil made 
from coal a do/en years before the drilling of 
Drake's well. Kerosene was merely a trade name 
coined, by Abraham Gesner, from a (J reek root 
meaning wax, thus signifying that it was a "par- 
affin" or "wax" oil, as most manufactured oils 
were then called. The first real illuminating oil 

132 



PETROLEUM PRODUCTS AND THEIR USES 

distilled from petroleum in this country was Kier's 
product known as "carbon oil," and it was not 
until later that the term kerosene came to be ap- 
plied generally to all petroleum illuminating oils. 

The first decade of using petroleum illuminating 
oils forms the darkest period in the whole history 
of the industry. Serious accidents and fires were 
daily occurrences, everywhere casting suspicion on 
this new lamp oil, and for a time even threatening 
the life of the industry. "Deadly kerosene" was 
then a common description, and more or less de- 
served, too, if the records of deaths, fire losses, and 
fatal accidents from lamp explosions are any in- 
dication. But the fault was not so much in the 
character of the oil as it was in the character of 
the men selling it. 

Much of the trouble came directly from the fact 
that, the kerosene was in greater demand than any 
of the other products. The naphthas had then 
practically no important uses, and hence sold for 
only a few cents a gallon. Kerosene, on the con- 
trary, sold readily at a price from five to ten times 
as great. It was to be expected, therefore, that 
strong competition among the refiners would lead 
many, especially the more unscrupulous ones, to 
turn as much of the lighter distillates as possible 
in with the kerosene. It was the presence of these 
more volatile oils which made the whole combina- 
tion extremely dangerous as soon as its use in lamps 
was attempted. 

The worst conditions, however, were due to a 
133 



THE STOR\ OF OIL 

class of plain frauds who advertised recipes for 
called "secret" processes, guaranteed to render 
gasolene naphtha, or benzine nonexplosive, and 
hence fit for use in lamps. This phase of the in- 
dustry was more or Less pari and parcel of the oil 
bubble craze, in both cases a gullible public appar- 
ently having taken leave of the lasl trace of com- 
mon sense. Peddlers and canvassers sold the " 
cret" recipes at a few dollars each, and about l s 7<> 

these "modified oils," just as explosive as <\ 

were sold throughout the country by a host of 
small dealers. The real character of the oils was 
concealed under such fancy names as "Liquid 
Gas," "Safety Gas," "Petroline," "Black Dia- 
mond Anchor Oil," "Sunlight Nonexplosive 
Burning Fluid, " and bo on indefinitely. The 
processes were so utterly ridiculous that it seems 

hard to believe any sane person would have put a 
grain of faith in them. Thus, the "Sunlight Com 
pany," of Michigan, would sell to any family the 
right to manufacture according to its formula for 
the small sum of $2, making of the recipe a rare 
secret indeed! The recipe given consisted in doa 
ing the crude naphtha with an utterly ridiculous 
conglomeration, including alum, alcohol, cream of 
tartar, sal soda, two tablespoon fuls of fine table 
salt, oil of sassafras, gum camphor, and om pint 
of raw potatoi s cut fun t 

The sale of these explosive oils and the impure 
kerosene increased rapidly on account of the gen- 
eral demand for artificial lights, but the increi 

134 






PETROLEUM PRODUCTS AND THEIR USES 

of fires, explosions, accidents, and losses of life 
from the use of kerosene lamps steadily kept pace 
with the greater use. "Deadly Kerosene' ' was get- 
ting in its work not only here but abroad as well, 
and pamphlets illuminated with skull and cross 
bones were circulated, denouncing the "fatal 
liquid." Public indignation mounted high, and 
constant agitation of the subject soon brought ma- 
terial results in the form of legal restrictions to 
which all illuminating oils must conform. 

Other factors also aided in removing the stigma 
which has been associated with the name of kero- 
sene. The lighter oils were coming to have a value 
of their own, and the price of kerosene was some- 
what lower, so that, with less difference between 
the prices of the two products, there was no longer 
such strong temptation to mix naphtha with kero- 
sene. Processes of distillation had been materially 
perfected, and the separation of naphtha from 
kerosene could be made more accurately. Lamps, 
also, underwent distinct improvements with the in- 
troduction of the familiar Duplex and Rochester 
burners, while various safety appliances mini- 
mized the danger of fire if the lamps were acci- 
dentally tipped over. Finally, the elimination of 
much of the competition in refining brought with 
it a higher standard of quality through the desire 
to remove all grounds for complaint, and to extend 
thereby the popularity and sale of the oil. 

At the present time American kerosene is used 
the world over without a thought of danger, and 

135 



THE STORY OF OIL 

fires or explosions traceable to its use are few in- 
deed. Where such accidents do occur, they an 
more often the result of carelessness in handling 
lamps or of imperfections in the lamps themselves. 
If the fault is proved to lie in the oil, every effort 
is made to correct immediately the imperfections 
in manufacture. The reward of this improvement 
is found in the practical monopoly which kerosene 




The Old and the New Lampe in china. 



enjoys to-day in the Mold of illuminating oils. 
Rape seed, sesamum, mutton fat, whale oil, tallow 

and sperm candles, coal oil and shale oil have all 
been forced far into the background by the supe- 
rior qualities of modern kerosene. Kerosene in an 
ordinary cheap lamp will give more light and bet- 
ter light than half a do/on of the host sperm 
candles at a cost of only a fraction of a cent an 
hour. It would be impossible to calculate the 

136 






PETROLEUM PRODUCTS AND THEIR USES 

value of the introduction of this cheap and conven- 
ient light to the world at large. It has been un- 
questionably one of the greatest of all modern 
agents of civilization. 

At the present time, of course, the use of illumi- 
nating oil in numerous places has been crowded 
out by gas or electricity, but it must not be as- 
sumed that the oil lamp is disappearing. In rural 
districts the world over its use is increasing enor- 
mously, and in some cities modern "arc lamps," 
using kerosene, are now actually being installed 
where gas or electricity has been formerly em- 
ployed. In Russia and Sweden, especially, pow- 
erful lamps using petroleum oil and an incandes- 
cent mantle of the Welsbach type, are rapidly 
growing in popularity. Gas and electricity need 
plants and attendants for their manufacture. The 
petroleum arc lamp needs only compressed air to 
force the oil under pressure into the orifice where 
it is burned. This pressure may be furnished by 
an ordinary bicycle pump. Lamps of 1,500 candle 
power have proved entirely successful— a power- 
ful lamp of this type having been installed in one 
of the lighthouses at Alexandria, Egypt. For the 
same intensity the oil arc lamp is cheaper than 
either gas or electricity, costing about two cents 
per hour for a lamp of 800 candle power, as against 
two and a half cents for gas, and six and a half 
cents for electricity. The oil lamp has, also, the 
greatly superior advantage of being available 
where gas and electricity are not. For this reason 

137 



THE STORY OF OIL 



the new oil lamp promises to make petroleum, as 
an illuminant, more important than ever. 




A Petroleum Buoy, 



Petroleum products, aside from kerosene, also 
find some use in illuminating purposes, but on a 

138 



PETROLEUM PRODUCTS AND THEIR USES 

far less important scale. In the process known as 
the manufacture of air gas, or carbureted air, 
some one of the lighter distillates, usually gasoline, 
is employed. Crude petroleum, the so-called gas 
oil from the tar still, or some other petroleum prod- 
ucts are also used to the extent of millions of bar- 
rels a year, in enriching coal gas and water gas, 
while to a less degree they are used to make oil 
gas directly. Oil gas is used widely in lights for 
buoys at sea, in lighthouses, and in railroad 
trains, the superior advantage lying in the ease of 
compression without impairing the quality. The 
familiar Pintsch system of lights, generally found 
in the better class of railway cars in this country, 
utilizes oil gas. 

The use of petroleum fuel is a close rival of 
kerosene in importance. In one form or other- 
crude, refined oils, or residuum— vast quantities 
are burned the world over, and every year the con- 
sumption for locomotives, steamers, stationary en- 
gines, and industrial purposes is greater than 
before. These petroleum fuels perform an invalu- 
able service, especially in countries where other 
forms of fuel are not abundant or not readily se- 
cured. Thus, in Russia and all Western Asia, in 
the southwestern part of the United States, and 
along the Pacific coast of both North and South 
America, petroleum fuel supplies a long-felt want. 
Even in countries where other fuel is abundant, 
easily secured, and relatively cheap, the petroleum 
stove and the gasoline or naphtha engines meet a 

139 



THE BTOR? I '1 OIL 

multitude of demands which could nol be supplied 
so conveniently and satisfactorily in any other 
way. 

Gasoline or naphtha and kerosene find a wide 
use in "oil stoves" of many Borts for domestic pur- 




( til Burner in ( hrdinary Range 



poses, principally for heating and cooking, th< 
called gas stove or "blue Same 91 stove, being un- 
rivaled where economy of time, space, fuel 
and maximum results are desired. Blast lamps of 
all kinds, particularly for plumbers' work and 
similar purposes, quickly secure a high degn 
heat by burning one of the lighter petroleum oils. 

140 



PETROLEUM PRODUCTS AND THEIR USES 

The crude oil is used extensively in metallurgical 
process, in smelting and refining, in glass fac- 
tories, in burning bricks and lime, in smithy fires, 
and many other industrial establishments. Only 
recently one of the largest copper companies in 
Mexico has signed a contract calling for the deliv- 
ery of several million barrels of fuel oil to their 
refinery during the course of the next three years. 

From the industrial standpoint, the introduc- 
tion of oil fuel has been of tremendous importance 
where coal was hard to get. In the Volga districts 
of Russia hundreds of manufacturing establish- 
ments have been located solely with reference to 
this supply of fuel. California industries have 
been stimulated by the local supply of cheap oil, 
where formerly all coal had to be imported, and. 
in South America, oil has been the salvation of 
the nitrate industry. The greatest of all the 
uses for petroleum for fuel is as a source of motive 
power, either as a substitute for coal in generating 
steam or as direct power in the gasoline or "naph- 
tha" engine. The power in the former case de- 
pends on the superior heat-generating capacity of 
petroleum— crude, residuum, or fuel oil— as the 
case may be, while the latter utilizes the explosive 
nature of petroleum vapor when mixed with air. 

Beginning about 1860, experiments with crude 
petroleum or residuum as fuel were carried on al- 
most simultaneously in Russia, France, England. 
and the United States, many devices being tried 
to facilitate burning of the oil in a fire box similar 

141 



THE STORY OF OIL 

to that used for coal. Open pans and steplike 
series of grates and griddles, over which the oil 
Mowed, gave fair results, hut an Englishman's ex- 




Fuel Oil Engine. 



periments with a nozzle sprinkler for introducing 
the oil into the furnace in a je1 of spray marked 
the real beginning of success. The old forms of 

142 



PETROLEUM PRODUCTS AND THEIR USES 

oil furnace were rapidly displaced, the spray and 
jet being universally recognized as the only ef- 
ficient burner. Improvements in the details of the 
burner have been introduced from time to time, 
but the basic principle has remained practically 
unchanged since the first patent was granted in 
1865. 

The oil burner of to-day is essentially a simple 
affair. A jet of steam or compressed air from an 
injector drives the oil in the form of spray into 
the fire box, where air enough is supplied for com- 
bustion. In some burners a second jet of steam 
entering the fire box at one side is directed across 
the current of sprayed oil so that it is spread out 
to a greater heating surface. 

The mechanical perfection of the oil burner 
quickly led to the adoption of petroleum fuel in 
many European countries,' especially for use in 
locomotives and steam vessels, while in Russia 
great numbers of industrial establishments fol- 
lowed suit. At first the Russian fields were the 
chief sources of oil fuel supplies, and the enor- 
mous home consumption, coupled with the poor 
transportation facilities, interfered with the 
proper expansion of its uses. But the later ex- 
pansions of the industry in the Russian and Euro- 
pean fields generally and the discoveries of great 
quantities of low-grade oils, more valuable for fuel 
than for anything else, in Texas, California, and 
Borneo, acted as a decided stimulus on the fuel-oil 
trade. 

143 



THE STORY OF OIL 

Oil-burning locomotives are now used in all parts 
of the world, and are increasing in number yearly. 
On the Russian railways, the astatki or residuum 
has largely replaced all solid fuels. In South 
Africa the development of modern means of trans- 
portation was greatly retarded by the difficulty of 
securing fuel until oil fuel presented a means of 
salvation. In Peru petroleum fuel has performed 
a service for the railroads similar to its service in 
the nitrate fields of the Chilean deserts. In Persia 
the success of the new road to Bagdad hinges 
largely on the available supply of oil t'<>r fuel. 
There is a good reason for this importance of liquid 
fuel in locomotives, for it is s;iid that, with a 1<>c<>- 
motive in good order and handled by a skillful 
driver, two tons of petroleum are equal to three 
tons of the best quality of coal. 

The adaptation of oil fuel to locomotives was 
naturally accompanied by similar experiments en 
steam vessels. Since 1870 steamboats on the Cas- 
pian have used oil fuel almost entirely, and its 
adoption for both merchant and naval vessels has 

gradually spread to all the important maritime 
countries of the world. Two-score or more of the 
vessels in the fleet of the Shell Transport and 
Trading Company, an English concern, use petrole- 
um exclusively with unqualified success and valua- 
ble economies. All local vessels on the California 
coast, and many of the large ocean-going steamers 
sailing from San Francisco, burn California petro- 
leum with the best of results; nearly a hundred 

144 



PETROLEUM PRODUCTS Ai\D THEIR USES 

and fifty vessels of all classes from that port are 
now fitted with oil burners. Important steamship 
lines, such as the North German Lloyd, Hamburg- 
American, and China Mutual, have already intro- 
duced petroleum into their fleets either as an aux- 
iliary or as the sole fuel. As an auxiliary fuel it 
has also been adopted in our own navy and in 
the navies of the principal countries of Europe, 
the great advantage being that, in case of emer- 
gency, it gives a means of suddenly increasing 
the fires and using full steam almost immediate- 
ly, simply by turning the oil into the injectors. 
Many of the newer battle ships, therefore, are 
fitted with furnaces to use both coal and oil. But 
the greatest triumph of all is in the choice of oil- 
burning furnaces for the new English destroyer. 
The Swift, recently launched and claimed to be 
the fastest craft in the world. Believing that oil 
fuel is to be much more important for naval pur- 
poses in the future, the British Government has 
sent two experts to examine the Canadian oil fields 
with reference to their capability of furnishing oil 
for the British navy. Great Britain desires to 
control her own supply of fuel oil, to guard against 
possible trouble in securing it in time of war. 

The advantages of petroleum over coal as a fuel 
are almost innumerable. First, and most valuable 
of all, is its greater heating power, weight for 
weight, giving from thirty to fifty per cent more 
steam with the proper burners; two tons of oil are 
usually considered to be the equivalent of three 
11 145 



THE STORY OF OIL 

tons of coal. For the same power oil occupies Leas 
space; thirty-six cubic feet of oil being equivalent 
to some sixty cubic feet of coal. 

Oil is easier to handle and easier to transport; 
a locomotive using oil can take on 150 gallons in a 
minute while making an ordinary stop at a station, 
and a vessel in a port or at sea can bo resupplied 
in half the time necessary for coating operations, 
without dirt or difficulty. In the age of oil there 
is no dirt or dust, practically no smoke, no ashes 
or clinkers to be removed, no big force of stokers 
necessary, no sparks to Bel tiros. Oil can be lighted 
almost instantly and is under perfecl regulation; 
a simple turn of the oil valve bringing response to 

any demands, while as 8001] as power is no longei 

needed the oil is shut oil' and the expense stops. 

The economy in this virtue is tremendous, espe^ 
cially in locomotives where starting and stopping 

give constantly varying demands on the fuel re- 
quired. 

The chief difficulty in the way of the general use 

of oil fuel on board vessels is found in the uneer- 
tainty of securing supplies where wanted. Coal- 
ing stations are located in every quarter of the 

earth, but the places where fuel oil can be had art 
still few and widely scattered. Therefore, until 
the storage of supplies becomes general at the im- 
portant ports of the world, the adoption of oil as 
the only fuel on naval stations would entail too 
many risks, since the supply might be cut off in 
time of war. In the case of merchant vessels ply- 

14G 






PETROLEUM PRODUCTS AND THEIR USES 

ing between definite ports, this objection does not 
present any serious obstacle, and the many ad- 
vantages of oil fuel are rapidly being put to practi- 
cal use in vessels of every description. 

The most widespread use of petroleum as fuel, 
however, is not in locomotives nor steamers, but in 
the gasoline engine, which, in its varying forms, 
lias been adapted to practically every namable in- 
dustrial process requiring mechanical power. The 
term "gas engine" is commonly applied indiscrimi- 




Petroleum Motor Coach on an English Railway. 

nately to all engines which derive their power from 
the " explosion " of gas or oil spray when mixed 
with air in a cylinder. This explosion is nothing 
more than the very rapid burning of the fuel which 
may be artificial or natural gas, gasoline, naphtha, 
benzine, or even kerosene, but its sharp report is a 
familiar sound in every corner of the world. Here 
only those engines using petroleum products need 
be considered ; to this class the name gasoline en- 
gine is generally applied from the fact that com- 
mercial gasoline is the chief oil used. Differ- 

147 



THE STORY OF OIL 

ent types of engines use the oil in the form of 
spray, as a vapor compressed with air, or by con- 
verting it into gas, but the underlying principle is 
essentially the same. In every case the power is 
generated by the high degree of heat created, and 
consequent great expansive force developed, as the 
mixture of oil and air is fired in the combustion 
cylinder. This expansive force works exactly like 
steam in a steam engine, in driving the piston back 
and forth, the power thus developed being trans- 
mitted by rods and a crank shaft as in other en- 
gines. 

Engines depending on this principle of the ex- 
pansive force of air and fuel undergoing com- 
bustion in a cylinder were suggested before the 
days of steam power, yet the actual importance of 
this type dates from the perfection of the Otto 
({as Engine, only about forty years ago. The last 
fifteen or twenty years, in fact, have marked the 
major part of the enormous increase in the em- 
ployment of engines using gasoline, partly as a re- 
sult of the greater ease in securing regular supplies 
of the oil, hut mainly through the application of 
gasoline engines to automobiles and small boats. 
These uses suggested the great possibilities which 
were capable of development, and, as a result, many 
different engines, varying only in minor details. 
have been put on the market. 

The early engines were not regarded as suitable 
for plants requiring more than fifty or sixty hon 
power, but at the present time the multiple cylinder 

148 



THE STORY OF OIL 

types are built to develop hundreds of horse power. 
Big industrial establishments now find gasoline en- 
gines economical in many ways, the advant^ag 

being no less marked than in the ease of petroleum 
fuel for locomotives and steamers. Gasoline engii 
have invaded almost every trade and every country 
in the world. The modern system of distributing 
oil affords, even in the small country town, a ready 
moans of securing the necessary fuel, and. on all 
sides. From the modern factory down to the rough 
mill in the backwoods, from the needs of the greal 
manufacturer to these of the modest farmer, the 
gasoline engine has proved iis usefulness. In the 
old days the sawmill or gristmill had to wait for the 
water to turn its wheel, now power is always ready 
at a minute's notice. Old-fashioned wood sawing 
and churning laboriously by hand have given way 
to n small "motor," which performs both sen i 
equally well, besides supplying power for pumping 
water, threshing and grinding -rain, turning a 
lathe ov grindstone, and any other need that may 
rise. So it is all through the modern industrial 
world, with thousands of engines, especially the 
small ones o\' a few horse power, performing 8 
service which cannot he overestimated. The small 
steam engine and boiler has almost entirely disap- 
peared and in its place the gasoline engine does the 
same work more conveniently, more cheaply, and 
more satisfactorily. 

The marine gasoline engine has just as com- 
pletely revolutionized the character of small craft. 

150 



PETROLEUM PRODUCTS AND THEIR USES 

No one who has watched the enormous growth of 
the fleets of " power boats " for pleasure pur- 
poses can doubt the value of the gasoline engine. 
To the thousands of fishermen using small boats in 
the shore fisheries up and down our coast, it has 
come as a wonderful boon. These men who were 
so sorely vexed by wind and tide ten years ago, 
now calmly make their way to and from the fishing 
grounds irrespective of the weather. Head winds 
no longer cause troublesome delays; to get be- 
calmed on the w r ay to market with a valuable catch 
is no longer feared. The small engine now carries 
the fishermen out and brings him back at his will 
independent of the fickle breeze. By scores and by 
hundreds the fishermen everywhere have adopted 
this auxiliary power, which has opened a new era 
for them. Larger sailing vessels, too, especially in 
the coastwise trade, are installing gasoline engines, 
even up to several hundred horse power, for the 
advantage of auxiliary power is very great when 
entering port, or when the wind is light. The time 
is probably not far distant when the major portion 
of the big coastwise fleet will be so equipped. 

Yet most significant of all perhaps is the place 
occupied by the gasoline engine in the develop- 
ment of submarine torpedo boats to which so much 
attention is now being given. The economies of 
space offered by this type of engine and its fuel 
supplies, and especially the much less intense heat 
emanating from the engine, are the real factors on 
which submarine craft depend for their success. 

151 



THE STORY OF OIL 

The lubricating oils, from the standpoint of prea- 
ent-day mechanical processes, fill a need which is 
hardly less important than the need for artificial 
light or for fuel. No other lubricating oils in the 
world can rival those obtained from the besl grades 
of paraffin petroleum from the Appalachian fields. 
Their reputation extends to every part of the 
world, and nine tenths of the world's machinery 
at the present time uses petroleum lubricants. 
These oils are superior in r\(>vy way to the old ani- 
mal or vegetable lubricants, safe!-, cheaper, more 
likely to be pure, and do not gum so readily. It 
is not surprising, therefore, that millions of dol- 
lars worth in sum total is being exported annually 
with consignments going to every country when 
modern machinery is used. 

An innumerable number of special brands or 
grades of straight petroleum lubricants are made 
for different purposes and sold under trade namett 

At. the same time, a constantly increasing number 
of compound oils, mixtures of petroleum oil with 
some vegetable or animal oil. are coming to be pre- 
ferred for certain uses. Other oils or greases are 
commonly made by grinding graphite, mica, or 
some insoluble soap with a petroleum lubricator, 
for use in heavy, slow-moving machinery. 

Every conceivable <rrade of oil, from the very 
thinnest and lightest down to the heaviest axle 
grease, finds a place in the list of petroleum lubri- 
cants, while the single use of certain grades in 
steam cylinders makes their manufacture indis- 

152 






PETROLEUM PRODUCTS AND THEIR USES 

pensable. High-pressure steam decomposes animal 
oils and causes the formation of fatty acids which 
act on all common metals thus injuring the engine. 
Pure petroleum oils, however, are unaffected by 
high-pressure steam and consequently fill an ex- 
tremely important place in all big power plants. 
A much used form of lubricating oil, though not 




" Motor' ' Plow Using Gasoline Engine. 



usually regarded as such, is the familiar compound 
known as vaseline. Vaseline is solely a trade name 
for a product of petroleum originally introduced 
by the Chesebrough Manufacturing Company, of 
New York. In its character it is more closely re- 
lated to the lubricating oils than any other of the 
products. The Chesebrough Company, now a part 
of the Standard organization, controls the name, 

153 



THE STORY OF OIL 

vaseline, through its patent rights, but other con- 
cerns are manufacturing essentially the same thing 
under such names as— petrolatum, petrolene, p 
troleum jelly, cosmolene, and so on. Vaseline finds 
its principal use in the drug industry where it fills 
a long-felt want. It can be mixed with most dm 
without any chemical action taking place thereby 
making it possible to compound salves and similar 
remedies, mainly Tor external use, which will keep 
unaltered for a Ion-- time. This use of vaseline is 
now the only important medicinal application of 
any petroleum product. 

Paraffin first became important in the manufac- 
ture of paraffin or wax candles, in which it has al- 
most, completely displaced the sperm candle and 
tallow fck dip." Persistent efforts in booming its 
use and placing it on the market in convenient form 
have succeeded, however, in making paraffin an 

indispensable article in a variety of manufacturing 

processes as well as in ordinary household use. The 
enumeration of a few of these will illustrate its 
value. In the manufacture of matches, it is used as 
a coating for the heads to make them waterproof, 
and it finds a similar use in waterproofing fabrics. 
It is used as alining for barrels; in glazing paper; 
and in the manufacture of u wax" or "oil 1 
paper; in the manufacture of ornaments from 
gypsum and other minerals; in laundry work: 
a preservative for foods of all soils, especially in 
the domestic canning of fruits; in waxing flow. 
to protect labels and stoppers in bottles of corro- 

154 



PETROLEUM PRODUCTS AND THEIR USES 

sive liquids; in electrical work as an insulator; as 
the basis of chewing gum ; and for a host of other 
uses of every description. 

Besides these uses of the principal products al- 
ready enumerated, there are a multitude of other 
ways in which petroleum compounds are employed. 
The lighter products are used as solvents for caout- 
chouc, various fatty oils, and especially to dissolve 
resin in the manufacture of varnish. They are 
used as substitutes for turpentine in mixing the 
cheaper grades of paints, in extracting oils from 
seeds, in the manufacture of linoleums or oilcloths, 
in extracting greases from leather, in the prepara- 
tion of jute, in dry cleansing, and so on. The 
crude oil is used to kill insects, as in the successful 
campaign against mosquitoes in many malarial dis- 
tricts or against the San Jose scale on fruit trees. 
It is used to protect animals against certain pests, 
as the gadfly, and to cure various skin diseases. It 
preserves piles and wharf timbers from the injuri- 
ous action of water and the many destructive forms 
of animal and plant life, being just as effective as 
the more expensive creosoting. It is used very 
widely and successfully on railways and on mac- 
adam carriage roads to prevent the dust nuisance, 
being much more lasting and far more efficient than 
water. From the tar valuable dyes are made and 
even the coke from the tar still is ground and 
made into electric-light carbons, artists' crayons, 
and the like. 

The whole realm of common uses for petroleum 
155 



THE STORY OF OIL 

products is almost beyond conception. Some faint 
idea of the tremendous importance of the petrole 
lira industry in its relation to other industries may 
be gained from the simple statement that, save for 
the water he drinks and the air he breaths, every 
possible necessity of a man's life may be supplied 
either directly or indirectly through the use of pe- 
troleum products; even his supply of water may be 
pumped by a gasoline engine. 






CHAPTER IX 

THE REMARKABLE GROWTH OF THE OIL INDUSTRY 
IN THE UNITED STATES 

The marvelous expansion of the petroleum busi- 
ness in this country is without a parallel in the 
whole realm of industrial and commercial develop- 
ment. It is a magnificent tribute to the success 
of American energy and ingenuity, in spite of 
the bitter criticism directed against it and the gen- 
eral deliberate ignoring of its real importance. 
Periodic eruptions of worthless stock companies, 
swindling a class which is ever ready to be duped 
again, and the fact that a single small group of 
men has come to control nine tenths of the indus- 
try, have been deemed sufficient reason for hurl- 
ing invectives at the very mention of oil. But, 
whatever the moral or legal virtues of these cases 
may be, they do not in any way detract from the 
value of a product which stands so high on the list 
of our national resources. 

Within the space of a single lifetime, easily with- 
in the memory of the older generation to-day, the 
petroleum industry has grown from nothing to gi- 
gantic size. Fifty years ago a group of men in 

157 



THE STORY OF OIL 

New Haven were planning to send a railroad con- 
ductor to seek for oil. Now over 50,000 wells are 
turning out millions of barrels of oil a year. Prom 
the narrow confines of Oil Creek Valley, in Penn- 
sylvania, the Industry lias spread over outward 
until it touches the four limits of the country, from 
Pennsylvania to California and from Texas to 
Alaska. A half do/en great fields, widely sepa- 
rated and of different characters, support active 
operations in more than a do/en slates. What was 
a local experiment in a few backwoods counties 
has grown to be a great industry of the whole 
nation. 

In 1859 the entire output of petroleum was only 
2,000 barrels; now over two hundred times that 

quantity is produced every day in the year over 
160,000,000 barrels in a twelvemonth. Prom the 

time Drake's well began to yield, in 1859, until the 
close of 11)07, the total production for the forty- 
eight years reached the stupendous figure of 1,800,- 
ooo, ooo barrels. Such a quantity is so inconceiv- 
able that it means nothing except through compari- 
son. Allowing five and six tenths cubic foot for the 
average barrel of Eorty-two gallons, this quantity 
would fill a lake covering some hundred square 
miles and five feet deep. If stored in the ordinary 
40,000-barrel cheesebox tank's, the tanks would 
make a solid line for over 700 miles. With the 
whole quantity placed in the average-sized barrels 
lying ( 4 nd to (Mid, the line would cover over 750,000 
miles or much more than sufficient to form a COU- 

158 



GROWTH OF THE OIL INDUSTRY 

tinuous loop passing ten times around the earth at 
the equator, to the moon and back again. 

Oil which had practically no general use half a 
century ago, even at home, now occupies an essen- 
tial part in a host of industrial processes and finds 
its way into practically every civilized quarter of 
the globe. In the home use alone it has added enor- 
mously to the wealth of the country, but it has not 
stopped there. Billions of dollars have been netted 
from its sale in foreign countries. In recent years 
it has brought from other nations of the world a 
return of $10,000 an hour for every hour in the 
day and every day in the year. Such unparalleled 
commercial development in so short a time is truly 
entitled to stand as one of the greatest of all the 
great events in the closing years of the nineteenth 
century. Yet the praises of oil are rarely sounded. 

Like most other mineral industries, the expan- 
sion of the petroleum business during the half cen- 
tury of its existence has been in a series of great 
leaps and bounds as new productive areas have been 
successively discovered and developed. Sudden 
booms in new districts and rich strikes in old fields 
have marked the whole progress of oil history, so 
that where one year saw a production of only a few 
thousand barrels, the succeeding year might wit- 
ness a production risen to millions of barrels in 
one sudden leap. 

Everywhere the increase a hundred- or a thou- 
sandfold in a few years has been a typical feature 
of the development as each field has entered on its 

159 



THE STORY OF OIL 

period of important expansion. In the eighties it 
was Ohio; in the nineties, West Virgina and Cali- 
fornia; and in the last decade, it lias been Texas, 
Kansas, and Illinois. The production of fifty bar- 
rels in Texas in 1895 had risen to over 28,000,000 
ten years later; and an industry yielding 200 bar? 
rels in Illinois in 1902 has grown to a 24,000,000- 
barrel industry in five years. Such prodigious 




Moving oil Tank t<> a New Field in Pennsylvania, 

additions have sufficed to make the total produc- 
tion of the country rise rapidly and with only 

occasional, brief downward turns. Bui success has 
been won and maintained only by the unfailing 
adherence to the oilman's creed— drill, drill un- 
ceasingly in new fields and old. 

The early development of the industry must be 
credited bodily to western Pennsylvania. For fif- 
teen years after Drake's well began to yield an 
kt incredible quantity, at the rate of twenty-five 

160 



GROWTH OF THE OIL INDUSTRY 

barrels a day, ' ' Pennsylvania produced practically 
the entire yield of crude oil. The extension of op- 
erations in all directions from Oil Creek had 
brought the total amount above 10,000,000 barrels 
by 1874, yet only small additional supplies were 
produced outside the limits of that state. 

During the boom days in the sixties, the hope of 
M striking oil " led to the drilling of wells every- 
where from Michigan to Alabama, and from Massa- 
chusetts to Missouri. Traces of oil, it is true, were 
found in innumerable cases, but, with a few excep- 
tions, they were nothing more than traces with 
absolutely no prospect of securing oil in paying 
quantities. The two important exceptions were in 
West Virginia and Ohio. After Drake's success, 
boring for oil was done in both states, and several 
producing wells were struck. In West Virginia, 
a second oil boom to rival the one in Pennsylvania 
was beginning, with a town projected and a crowd 
of speculators at hand, when the Civil War broke 
out. Confederate raiders burned the stores of oil, 
destroyed the wells, and completely obliterated all 
trace of the progress made. Successful operations 
were resumed in 3865, but the combined supply 
from both states ten years later was less than two 
per cent of the total production for the country. 

The first important development outside of 
Pennsylvania came in 1885 and 1886 in the north- 
western part of Ohio, in the district since known 
as the Lima field. The development started more 
or less accidentally through efforts to secure a sup- 
12 161 



THE STORY OF OIL 

ply of natural gas. This product of the oil regions 
was then being very profitably used in Pennsyl- 
vania, and for many years it had been burned on 
a small scale in the vicinity of Lima, Ohio. In 
1885 a well drilled in an attempt to secure a larger 
supply of gas near that place produced a fair quan- 
tity of oil instead. This result was entirely unex- 
pected, for all the Ohio petroleum prior to that 
time had been confined to a small district in the 
southeastern part of the state along the edge of 
the great Appalachian field. 

The new deposit was wholly unlike that found in 
the older localities, the character and quality being 
quite inferior to the Pennsylvania product. In 
fact, the color was so dark and the odor so dis- 
agreeable that the oil was regarded with general 

disfavor. It was the first of the sulphur or " stink- 
ing oils," and because this quality prevented its 

manufacture into kerosene by the processes then 

known, its use was confined largely to fuel pur- 
poses for some time. But, strangely enough, the 

character of the oil had no bad effect on the rapid 
expansion of operations. There was a plentiful 
demand for fuel, and as wells were dialled in great 
numbers, the production for the state increased 
with giant strides. 

Ninety thousand barrels in 1884, then over half 
a million, a million and three quarters, five million, 
ten millions barrels, is the summary of four years' 
growth. By this time persistent experiments had 
succeeded in perfecting processes to eliminate the 

162 



GROWTH OF THE OIL INDUSTRY 

sulphur and make possible the manufacture of ker- 
osene from the Lima oil. Ohio refined products im- 
mediately became an important factor in the oil 
market, and at the same time the oil was more valu- 
able to the producers. Additional developments 
were thereby directly stimulated with the annual 
production steadily mounting upward. The even- 
tual outcome was already apparent, for the older 
localities were slowly dropping back from their 
long unrivalled position so far in the lead. In just 
ten years from the time the Lima field was opened, 
Ohio forged to the front as the most important 
petroleum-producing state in the country. For full 
thirty-five years supremacy, undisputed, unap- 
proached, in the country, in the whole world even, 
had belonged to Pennsylvania, the pioneer. Xow 
the leadership was gone from the states of the 
Appalachian field, never to return. 

West Virginia was the next one to enter the 
ranks of important producers. A wildcat well 
drilled in the fall of 1889, in Marion county, far 
away from any other known productive area, 
proved to be a profitable venture, and, in spite of 
the necessity of drilling to great depths in most 
localities before the oil-bearing strata were reached, 
the industry increased immediately. The Pennsyl- 
vania output was declining rapidly during the 
nineties, notwithstanding every effort to keep it 
up to former levels, and at the end of the decade it 
was forced to yield second rank to the younger field 
to the south. 

163 



THE STORY OF OIL 

The operations in Ohio spread across the State 
line into Indiana early in the nineties, and that 
portion of the Lima-Indiana field was the scene of 
.vigorous drilling. These important strikes in the 
new Ohio and West Virginia fields also led to re- 
newed, persistent efforts to discover oil in a great 
many places wiiere some indications of its pr 
ence were known, but where previous attempts had 
not been particularly encouraging in their results. 
A number of new districts were thereby proved to 
be oil bearing. Kentucky and Tennessee, contain- 
ing the southern extremity of the greal Appalach- 
ian field, developed a few successful wells and ap- 
peared in the list of productive states, though they 
never attained any importance. Illinois. Kansas, 
Texas, Missouri, Indian Territory, and Wyoming 
all yielded a few barrels of petroleum each year 
from about 1890 onward, while California and Col- 
orado gave many indications of becoming impor- 
tant producers. 

The Colorado region in the vicinity of Florence, 
between Pueblo and the famous Royal Gorge, was 
the scene of prospecting operations as early as 1862, 
during the general attempt to find oil throughout 
the country. Small supplies were found near the 
surface and the usual stock companies were formed. 
but the total output, instead of increasing as it 
gave good promise of doing at one time, has steadily 
declined for the last fifteen years. 

California, however, has borne out every possible 
expectation so far as the quantity of oil is con- 

1G4 






GROWTH OF THE OIL INDUSTRY 

cerned. The existence of oil in California was 
known from the very beginning of its settlement. 
Oil floating on the surface of the ocean off the 
shores of Santa Barbara county was a constant 
source of wonder among the early navigators, and 
a semi-solid form of bitumen, formed apparently 
by the slow seepage of petroleum, was widely used 
as fuel and as a sort of cement roofing for houses. 

This general knowledge of the existence of im- 
portant petroleum deposits somewhere under- 
ground led to the usual course of events at the 
time of the Pennsylvania boom. Professor Silli- 
man, of Yale, whose favorable report had furnished 
the basis for Drake's operations, was secured to 
make a report on the oil from seepages in Ventura 
county, California. His report here, also, was glow- 
ing with praise for the new oil and its possibilities. 
Coming just as it did, near the height of the Pit- 
hole excitement, it aroused wild enthusiasm among 
the speculators. Developments were started from 
one end of the State to the other, and in their 
dreams promoters saw California turned into one 
great oil field. But trouble quickly appeared; 
drilling was extremely difficult, slow, and expen- 
sive. It soon leaked out that the samples of oil 
tested by Professor Silliman were quite unlike the 
low-grade oils found in the wells. None of the 
localities outside of Ventura county could be prof- 
itably operated. The boom was short lived. 

More than a quarter of a century later, a well 
was drilled near the old asphalt deposits in Los 

165 



THE STORY OF OIL 






Angeles, and a small steady supply of oil was se- 
cured. Once more the whole State was drilled over 
amid feverish excitement, and once more without 
success for some time. The Los Angeles wells, 
however, were visible proof that the oil was not 
confined to Ventura county. This knowledge was 
highly comforting and encouraging to the pros- 
pectors who had been filling the State full of holes, 
and wildcat drilling went on with untiring energy. 
In 1895 and 1896 the much-deserved success finally 

crowned their persistent efforts. The climax came 
when the famous " Blue Goose M flowing well was 
Struck in the Coalinga district only to be followed 

immediately by the more important strikes at 
Bakersfield. 

The boom of thirty years before was repeated on 
a much grander scale. Between two and three 

thousand oil companies were chartered in the 
course of three years; all of them sold stock, most 
of it in the East, and probably half of them really 
sunk wells in some pari of the State. Large sums 
of money were undoubtedly lost by the public 
through mismanagement and dishonesty on the 
part of officials and promoters, hut the benefit to 
California was undeniable. New territory was 
proved productive by wells sunk where sane in- 
terests would probably never have risked a penny, 
and by the time the excitement had subsided, the 
production was approaching 8,000,000 barrels a 
year, from which point it has risen steadily to 
nearly 40,000,000 barrels in 1907. 

166 



GROWTH OF THE OIL INDUSTRY 

One direct result of the oil craze is to be seen 
in the curious spectacle of oil being pumped from 
beneath the sea, at Summerland, a condition to be 
found nowhere else in the world. No less than sev- 
eral hundred productive wells have been drilled 
from derricks erected on piers which extend a 
thousand feet out into the surf, some of the 
wells having yielded profitably for a number of 
years. 

The successful expansion of operations in Cali- 
fornia was followed, and for a time quite outdis- 
tanced by the developments accompanying the great 
Texas boom. The story of the Texas fields is much 
the same as in California. Oil was discovered there 
as early as the sixties, though no valuable supplies 
were encountered until about 1894. Then a well 
drilled for water near Corsicana struck a good flow 
of oil at a depth of somewhat over 1,000 feet, but 
curiously enough no attempt was made to secure 
the oil at that time. The news that oil had been 
encountered, however, was spread, and a few years 
later outside interests began what proved to be 
the first successful oil development in Texas. 

A great rush began immediately ; operators and 
speculators flocking in from the older fields of the 
east, converted the little town of Corsicana into a 
noisy, hustling city. Derricks sprang up by scores ; 
wells were drilled within a few feet of one another, 
and yards, gardens, house lots, every available foot 
of surface was soon occupied. The production of 
crude oil in the State rose from fifty barrels in 1895 

167 



THE STORY OF OIL 

to over 800,000 barrels in 1900, bul these results 
fell far below the original expectations. Th< 
citement, therefore, subsided almosl as rapidly as 
it had appeared, only to be repeated tenfold a few 
years later. 

The great Texas strike of 1901 is still fresh in 
the memories of many. For years the escape of 
gas from the earth about a low mound near Beau- 
mont, known Locally as Spindle Top, had been re- 
garded as indicating the presence of petroleum. 
In Eact, a town had been laid out in l s !U and a 

well seine 400 feet deep had been drilled there 

without finding oil. Nothing more of importance 
happened until a new well drilled in January, 
1901, suddenly burst forth as a giant gusher, send- 
ing a solid stream of oil high above the derrick 
and yielding at the rate of 70,000 barrels a day. 
Such production had never before been heard of 
in this country. The news of the great Beaumont 
spouter brought consternation to the hearts of oil- 
men in v\i'vy important field. They could hardly 
realize the magnitude of a well capable of pro- 
ducing nearly half as much as the previous yield 
for the whole country. Only three such wells 

would more than double the former production! 

Small wonder it is that the Dews of the inferior 

quality of the oil was hailed with delight by oil- 
men all over the world. 

But the quality of the oil did not in any way 
lessen the mad rush to secure territory in the 

vicinity, any more than it had in Ohio fifteen 

168 



GROWTH OF THE OIL INDUSTRY 

years before. Land sold at the rate of $100,000 
an acre, and many experienced operators, failing 
to secure plots on any favorable terms, deserted 
the field entirely. Their places, however, were 
more than filled by the swarm of speculators and 
promoters who would agree to any terms, no mat- 
ter how exorbitant, in order to get a lease. An 
enormous crop of stock companies was started 
immediately, and for a few months investments 
and actual drilling operations were made in an ab- 
surdly reckless manner. The belief that the oil 
territory extended for many miles in every direc- 
tion was speedily and effectively shattered. Nu- 
merous other gushers, some approaching 100,000 
barrels a day at first, were struck, it is true, but 
it soon became clear that the productive area was 
wholly confined to about 300 acres covered by the 
Spindle Top mound. Outside of those narrow 
limits drilling was of no avail. Nowhere since the 
days of Pithole City had there been such a wild 
rage of oil excitement. Never before had so much 
utterly worthless stock been unloaded on a guile- 
less public, despite the bitter lessons of half a dozen 
previous bubbles. No other collapse was quite so 
sudden and complete. 

The Beaumont gusher, however, was the fore- 
runner of developments which temporarily placed 
Texas among the leading oil-producing districts in 
the world. Spindle Top alone yielded to the few 
lucky ones over 30,000,000 barrels in the first four 
years of its meteoric career, while other pools 

169 



THE STORY OF OIL 

quickly appeared with yields more than sufficient 
to counteract its failing supply. Sour Lake, Bat- 
son, Saratoga, Humble, all repeated on a smaller 
scale the history of Spindle Top. with gusher after 
gusher helping to swell the total for the State until, 
in 1905, it reached its climax with over 128,000,000 
barrels. 

This unprecedented rise of California and T< 
greatly changed the aspect of the industry. Up 
to 1001, the Appalachian and the Lima-Indiana 
fields bad been the main source of supply. In 
spite of the gradual decline in all the older areas, 
these two fields were still yielding more than three 

fourths of the total for the country, which had 
never risen much above 60,000,000 barrels a year. 
Practically all of it was high-grade oil for both 

illuminating and lubricating purposes. Beginning 

with 1901, however, the enormous supplies of the 
lower-grade fuel oil from California and Texai 

pushed the total production steadily upward, more 

than doubling the output in five years. 

Indiana was the next scene of great excitement 

over gushers struck in deep sand in 1904. Fabu- 
lous prices were paid for land, dividends of fifty 
per cent a month were declared, and the state rose 
with a single bound to an important position in 
the production of high-grade oil. Kansas followed 
the same example with extensive operations begun 
in 1003 and extending into the following years. 
when scores of wells were often completed daily. 
The productive territory was proved to extend 

170 



GROWTH OF THE OIL INDUSTRY 

over several thousand square miles in Kansas and 
what was then Indian Territory— the largest pro- 
ductive area in the United States, and perhaps in 
the world. Two years later the yield from this 
district ranked second only to the California fields, 
and in 1907 it broke every existing record with an 
output of over 45,000,000 barrels, or more than the 
whole country ever produced in a single year until 
1890. This enormous yield was entirely beyond 
all expectations, and it became a serious problem 
to take care of the oil, a difficulty that was solved 
only by the erection of hundreds of storage tanks 
to hold the surplus stock. 

The oil fever in southeastern Texas spread across 
the State line into Louisiana, where surface con- 
ditions closely similar to those at Spindle Top were 
known to exist. The first great gusher of the Jen- 
nings field was opened in 1904, its success result- 
ing in other wells being sunk rapidly. One well 
produced over 1,500,000 barrels in the first five 
months of its existence, and others of the same sort 
suggested a repetition of the meteoric career of 
Texas. Illinois sprang from obscurity into sudden 
prominence in 1906, when several thousand wells 
drilled in the eastern part of the State met with 
almost universal success. The production increased 
immediately from almost nothing to between 4,000,- 
000 and 5,000,000 barrels in that year and over 
24,000,000 barrels a year later, the most rapid de- 
velopment that any area has ever shown. Strangely 
enough this enormous development was accom- 

171 



THE STORY OF OIL 

plished in a thoroughly businesslike manner, with 

none of the usual excessive land values, little sp< 
ulation by mere adventurers and no stock peddling 
companies. 

It was fortunate that these new fields appeared 

as they did, since the decline of the Texas yield in 

1906 more than offset the new developments. For 
the first time in a dozen years, the total produc- 
tion of the country showed a marked drop, falling 
fro,,, over 134,000,000 barrels to aboul 126,500,000 
barrels. The great developments in Kansas and 

Illinois, with the steady growth in California in 

1907, however, carried the total yield to a figure 
never approached before, over 166,000,000 barrels. 

or nearly twice as much as all the rest of the world 

produces. 

on.- of the most astonishing features connected 

with this Steady expansion of the industry into new 
areas has been the great Change in values. I. 
cessive prices have, of course, been paid \'*>v oil 
leases in practically every iield down to the pi 
ent time, but, as a whole, the later years have been 
marked by more and more rational conditions. 
The total investments at Pithole, for example, ex- 
ceeded $25,000,000 during the short period of its 
existence, whereas the Washington field, twenty- 
five years later, represented an investment of L< 
than +2, 000. 000, and produced many times the 
amount of oil yielded at Pithole. More oil prop- 
erty changed hands in a day during the early 
booms than was transferred in a whole year two 

172 



GROWTH OF THE OIL IXDl'STRY 

or three decades later, and every transaction meant 
a revaluation above the former figure. Still later, 
the development of the Illinois field, in reality a 
greater boom than was ever seen in the Appa- 
lachian field, has marked an almost complete elimi- 
nation of the reckless speculative element. There 
bonuses of a few hundreds, instead of thousands, 
of dollars were paid on leases and royalties of an 
eighth of the oil instead of one third or one half, 
were accepted. 

Such is the story of the petroleum industry of 
the United States, where it has attained a magni- 
tude far above that of its closest rival. From a 
venture regarded with general skepticism, an in- 
dustry involving millions of dollars and employ- 
ing 100,000 persons has sprung up and expanded 
until it covers every section of the country. With 
great leaps and bounds, as field after field has 
been brought in, expansion has continued until 
it seems as if the limit must have been nearly 
reached. 

The original small refineries have been replaced 
by enormous plants each capable of handling thou- 
sands of barrels daily. Van Syckle's modest pipe 
line has grown into a network of feeding and trunk 
lines, sufficient to girdle the earth three or four 
times. Drake's well has to-day more than 50,000 
descendants in actual operation, and an unnum- 
bered host of others which have proved to be fail- 
ures or have ceased to yield. Petroleum products 
unheard of fifty years, ago, have long since been 

173 



THE STORY OF OIL 

manufactured by millions of tons yearly to fill a 
multitude of demands in everyday life. On all 
sides expansion has been on a scale truly marvel- 
ous in its proportions, and greater, far greater 
than ever before, during the last ten years. 









CHAPTER X 

THE GREATEST CORPORATION IN THE WORLD 

The idea of monopoly has, of late years, come to 
be inseparably associated with the petroleum in- 
dustry in this country as a result of the tremen- 
dous operations carried on by the Standard Oil 
Company. But oil monopolies are apparently as 
old as the industry itself. During the Persian days 
of possession in the Apsheron Peninsula, the Khan 
of Baku controlled the entire output of the oil 
springs, reserving the revenues for his personal 
use. This monopoly was continued, in one form or 
another, by the Russian Government until 1872, 
because the industry was profitable and the reve- 
nue was good. 

A more interesting and probably much more an- 
cient monoply than the one at Baku is said to have 
existed in Burma for unknown ages. There the 
privilege of digging for oil in the Yenangyoung 
field, in the Irrawaddy valley, was a hereditary 
right possessed by twenty-four families and handed 
down like a title of nobility from father to son for 
generations. The monopoly was perfect ; no out- 
sider could become a well owner even by purchase ; 

175 



THE STORY OF OIL 

the owner must be a member of one of the Yoya, or 
hereditary families. The head of each family alone 
had the power to grant permission to dig; he indi- 
cated the site for the well; and he received a roy- 
alty on the amount of oil secured. Only in cas 
of no direct descendants to inherit the right could 
the privilege be sold, with the consent of all the 
other joint holders, and then solely to some distant 
member of the same family. 

Modern times present do parallel to this close 
corporation, bat the tendency toward powerful 

concerns and the elimination of small enterpri- 
has hecn evident everywhere thai the industry has 
risen to important proportions. In a way, the very 
nature of the industry demands a certain amount 
of centralization of interests Tor its own protec- 
tion. No other industry offers greater opportunity 
for self-destruction through cutthroat competi- 
tion and consequent lowering of standards. Con- 
centration of control, or a combination of interests 
to some extent, is the only means of protection 
against the constant recurrence of such conditions. 
Nowhere else has this natural concentration gone 
so far as in the United States, where it has re- 
sulted in the development of the greatest corpo- 
ration in the world. Nowhere else has the in- 
dustry reached such a high degree of efficiency 
and perfection as it has under the guidance of 
this corporation. Baku, Burma, the Dutch Indies, 
and Japan, it is true, have powerful corporations 
backed by large capitals, but none of them can 

176 






GREATEST CORPORATION IN THE WORLD 

stand as a peer of the Standard Oil Company. 
Standard Oil has come to be a familiar name from 
one end of the world to the other, from the islands 
of the ocean to the wildest parts of the African 
desert, from the heights of the Andes to the barren 
wastes of Chinese Turkestan ; because it has stood 




A Standard Oil Tank Wagon in India. 

firmly for high quality of products and has per- 
fected the organization necessary for seeking mar- 
kets wherever human endeavor can transport a 
case of kerosene. 

Technically, this mighty combination is the 
Standard Oil Company of New Jersey, a corpo- 
ration with a capital of $100,000,000, chartered 
simply to hold the stock of a whole series of sub- 
13 177 



THE STORY OF OIL 

sidiary companies, but endowed in its "omni- 
bus " charter with the right to engage in almost 
every conceivable line of industrial activity. Prac- 
tically, the Standard Oil Company, as the dominant 
power in the petroleum business, is a multitude 
of different interests, brought under the control 
of a small group of men. Oil wells, refineries, 
pipe lines, distributing and selling companies, and 
manufacturing concerns of a dozen different sorts, 
in half the states of the United States and in every 
important foreign country make up the framework 
of this all-comprehensive organization. 

This greatest of all petroleum concerns is with- 
out any kind of serious rival in this country. The 
various affiliated companies comprising the stand- 
ard interests handle over eighty per cent of the 
crude oil put through the refining process; they 
produce over eighty per cent, of the refined prod- 
ucts, gasoline, kerosene, and Lubricating oils; and 
they control about the same proportion of the for- 
eign trade. Standard pipe lines transport nearly 
all the crude oil in the eastern and mid-continent 
fields, as well as increasing quantities in Texas 
and California. In Large sections of the country 
Standard products have absolutely no competitor 
in the market. 

Outside of the Standard organization, there are 
only about seventy-five refineries, most of them 
small, whose total annual consumption of crude oil 
is considerably less than that of the two Standard 
plants at Bayonne, New Jersey, and Philadelphia. 

ITS 



GREATEST CORPORATION IN THE WORLD 

Nearly a score of these so-called independent oper- 
ators are independent only in name. They are, in 
fact, so absolutely dependant on Standard pipe 
lines for their supply of crude oil that if the 
Standard so desires, they can be rendered quite 
incapable of presenting any effective competition. 
Actual competition of any kind, therefore is pos- 
sible only on the part of some fifty-odd small 
concerns scattered about the country and repre- * 
senting perhaps as much as a sixth of the whole 
industry. 

The first step toward concentration was largely 
a natural outcome of the character of the industry 
itself, especially as it existed under the unstable 
conditions prevailing from 1860 to 1870. The 
opening of Drake's well had marked the doom of 
the coal and shale oil industry and forced the man- 
ufacturers to change their plants over to petroleum 
refining. For a time these converted plants and 
the new establishments started in the oil regions 
were fully capable of handling all the oil produced. 
But the oil developments ushered in by the first 
deep wells yielded greater quantities than had 
ever been dreamed of before. This unexpected 
supply and the rapidly increasing demand in all 
quarters for the refined products soon overtaxed 
the powers of the existing refineries. Small con- 
cerns were the prevalent type at that time, and 
their limited resources rendered them incapable 
of adopting the improvements needed to meet the 
new demands of the industry. Large amounts of 

179 



THE STORY OF OIL 

capital were necessary to erect and operate plants 
of great capacity; to improve and cheapen the ex- 
isting processes of refining, and to profit from var- 
ious economies in handling, such as the building 
of spur tracks from refineries to the railroads, con- 
struction of pipe lines or control of tank-car serv- 
ice. Such advantages could be secured only by 
sonic powerful single concern or through the com- 
bination of several smaller interests. 

A small group of refiners in Cleveland, Ohio, 
were among the first to recognize this condition of 
the industry and to see the latent possibilities af- 
forded by a combination of interests. The inception 
of the idea is usually credited to John I). Rocke- 
feller, who had begun oil refining in 1865, and 
has long been the most prominent figure in the oil 
industry of the world. The first move toward com 
bination was made about 1867, when the firm of 
k ' Rockefeller, Andrews ami Flagler " took overthe 
group of refineries in which Rockefeller, his brother 
William, Henry M. Flagler, Samuel Andrews and 
Stephen Ilarkness were interested. All these re- 
fineries were located in Cleveland. Ohio, where a 
score of other concerns were operating independ- 
ently, the object of the Rockefeller combination 
being mainly to do a Larger business than their 
local rivals by uniting their efforts. At first the 
firm merely expanded its own business, without at- 
tempting to absorb others or engaging at all in 
the production or transportation of oil. By stick- 
ing to this policy the new firm forged ahead so 

180 



GREATEST CORPORATION IN THE WORLD 

steadily that within two years it was by far the 
strongest concern in its locality. 

The time was now ripe for the next move to- 
ward expansion. It came in 1S70, when the part- 
nership was changed to a corporation with $1,000,- 
000 capital, under the name of the " Standard Oil 
Company of Ohio." This was the first appearance 
of the name which has since become familiar in 
every household in the country. It is estimated 
that there were then fully 250 refineries scattered 
through the states from Ohio to the coast, with a 
total capacity of about 16,000 barrels a day. The 
Standard works at the time of incorporation were 
capable of handling about 600 barrels daily, thus 
making them one of the most important individ- 
ual establishments, but probably not much larger 
than some of their chief rivals. The reorganiza- 
tion, however, was epoch making ; it marked the 
beginning of the active campaign of expansion and 
for control of the industry, which has continued 
unabated down to the present time. 

The campaign was conducted along two main 
lines: first, to absorb other refining interests and 
secure control of that end of the business; and 
second, to obtain advantages of shipment not en- 
joyed by rival operators, as a means of eliminating 
existing competition and of crushing rivals which 
might appear in the future. Both of these strug- 
gles were carried on relentlessly and more or less 
simultaneously during the succeeding decade. 

The first effort at expansion was directed toward 
181 



THE STORY OF OIL 

the independent refineries situated in or about 
Cleveland, and, in the course of two years, prac- 
tically all of them, to the number of a score or 
more, had been secured in one way or another. 
Having thus established themselves securely in 
their own region, the Standard operators were in 
a position to turn their attention toward certain 
outside localities. Plants were first acquired at 
New York, Philadelphia and Baltimore to afford a 
foothold in both seacoast markets and in foreign 
trade, where the consumption was increasing enor- 
mously each year. The attack was then directed 
to the independent refiners scattered through the 

Pennsylvania oil regions and in three years the 
majority of theft had been forced to surrender. 

This policy followed everywhere, soon yielded 
to the Standard practically absolute control of the 
refining business. In 1870 the newly Formed Stand- 
ard corporation had represented not over five per 
cent of the total refining business. In 1878 the 

principal competitors had been so thoroughly elim- 
inated that the Standard controlled about ninety 
five \>vv cent of the business. Thus the first object. 
the domination of the refining business, had been 
successfully attained. 

Various means had helped carry the process of 
absorption to snch a satisfactory result. The larger 
concern had been able to adopt the many desirable 
innovations which small capital could not afford. 
Distinct advances in the methods of refining, per- 
fected by long and costly experiments, made it 

182 






GREATEST CORPORATION IN THE WORLD 

possible to distill grades of oil previously of little 
value, to utilize products hitherto lost in the resid- 
uum, and to make better products at less cost. 
Other economies were introduced by the Standard 
in the manufacture of their own barrels, cans for 
case oil, boxes, paint, glue, acid, and so on, all 
helping to lessen the cost of putting the refined 
oils on the market, in ways which were entirely be- 
yond the reach of the small plant. Acquisition by 
direct purchase or by consolidation, forcing their 
rivals to the wall by underselling and various other 
methods, were adopted to suit individual cases. 
The financial depression of 1873 also found the 
Standard well prepared to survive it, while many 
smaller concerns were quickly reduced to a con- 
dition where absorption by the trust was inevi- 
table. But the most important factor of all was 
undoubtedly found in the rebates and discrimina- 
tions in freight rates which the Standard was able 
to secure from the railroads. 

Cleveland was plainly a strategic point, as com- 
pared with Pittsburg or the oil regions, for the 
purpose of securing favorable rates on oil ship- 
ments. It was the happy possessor of two routes 
to the eastern markets and the seaboard : it had the 
New York Central Railroad and the water route 
by way of Lake Erie and the Erie Canal. At any 
time the refiners could easily ship by water if the 
railroad refused to give them satisfactory terms. 
The oil traffic was so important that the railroad, 
then struggling for existence, could not afford to 

183 



THE STORY OF OIL 

let it go elsewhere and the Standard know it. The 
result was obvious. This fact of competing rail 
and water transportation made it possible for the 
Standard to demand greater and greater conces- 
sions from the railroad, and the latter, utterly 
helpless, was forced to yield. Such a condition, of 
course, became a tremendously powerful weapon 
in the campaign against competitors and greatly 
facilitated the process of absorption. The enjoy- 
nient of freight rates a third or a half less than 
those paid by other operators made the Standard 
irresistible whenever it chose to crush independent 
interests and absorb them at its own price. 

Why this particular group of refiners always 
secured the greatest concessions has always been 
;i mystery. All the railroads at that time made 
a general practice of favoring large shippers t<> 
build 1 1 1 > freight traffic, hut how the Standard ever 
managed to wield such enormous power over the 
railroads is unexplainable. It extended in some 
cases even to demanding ami securing rebates on 
all shipments made by their competitors, or liter- 
ally compelling the railroad to pay the Standard 
for the privilege of carrying some one else's oil. 

As soon as it had acquired a linn hold of the re- 
fining branch of the business, the Standard turned 
its attention to the control of the pipe lines, which 
connected the wells with the local refineries and 
main shipping points on the railroads. When this 
third progressive step of expansion was begun, 
about 1874, there were many miles of pipes in the 

184 



GREATEST CORPORATION IN THE WORLD 

oil regions, operated by a large number of com- 
peting companies, but few lines exceeded ten miles 
in length. The United Pipe Line Company, the 
first controlled by the Standard, was formed in 
1874, and immediately entered into an agreement 
with the other leading pipe companies concerning 
a schedule of rates and special rebates to be re- 
ceived from the railroads. The companies partici- 
pating in the agreement were consolidated into 
three main concerns: the United, the Columbia 
Conduit and the Empire Transportation Com- 
pany, the United also having acquired by purchase 
most of the lines which had not been asked to be- 
come a party to the agreement. 

Lack of harmony, however, quickly disrupted the 
alliance and precipitated a brief but fierce war for 
supremacy between the three transportation com- 
panies and their associated refiners. The pipe 
lines were still merely serving as feeders to the rail- 
roads, so that the latter were also unavoidably 
drawn into the conflict to protect their own valu- 
able interests. Each one of the three main pipe- 
line companies, therefore, allied itself to the rail- 
road system with which it was most intimately 
associated in handling oil shipments : the Columbia 
Conduit Company with the Baltimore & Ohio ; the 
Empire Transportation Company with the Penn- 
sylvania ; and the United Pipe Line Company with 
the Erie and the New York Central. 

After a short period of armed peace following 
the disruption of the pipe-line alliance, the Empire 

185 



THE STORY OF OIL 

Company precipitated hostilities by securing pos- 
session of a refinery on New York harbor, and be- 
ginning the erection of another at Philadelphia. 
Both Standard interests and those of its railroad 
allies were threatened by this encroachment on 
their most highly prized preserves, and a furious 
struggle immediately began between the Standard 
and the New Y r ork Central on the one side, and the 
Empire and the Pennsylvania Railroad on the 

other. For six months the latter exerted every 
means in its power to crush the United Pipe Line 
and the Standard Oil Company. The Pennsyl- 
vania Railroad carried oil al a rate far below the 
actual cost of hauling, while the independent re- 
finers connected with the Empire Company sold 
oil for almost nothing in the territory previously 
controlled by the Standard. It was a case of at- 
tacking the Standard with its own weapons. But 
concentration of power had gone too far; the Stand- 
ard position was already rendered impregnable 
by its unlimited resources, and the Empire Com- 
pany, unable to continue the conflict longer, was 
forced to yield in 1S77. 

The victory over the Empire Company gave the 
Standard a new advantage, which was speedily 
improved. The Columbia Conduit Company was 
easily absorbed, while a seore or more of smaller 
companies, in fact, all which threatened to become 
competitors, were acquired by purchase. 

Thus, within eight years from its incorporation, 
the Standard Oil group controlled nine tenths of 

186 



GREATEST CORPORATION IN THE WORLD 

the refining business ; it either owned or controlled 
in some way every transportation agent in the oil 
regions ; it controlled the terminal facilities in the 
principal seaports; and it owned or held by lease 
the majority of tank cars on the chief railroads. 
The Standard was now the buyer, carrier, manu- 
facturer, and seller of petroleum. The dream of 
dominating the petroleum industry had taken only 
twelve years for its fullest realization. But peace- 
ful domination was far away. Supremacy had been 
acquired only through hard struggles, and other 
hard struggles must be won to maintain control. 

The Tidewater Pipe Line Company, organized in 
1879 by independent interests to transport crude 
oil to the coast, was the first and most important 
rival. The Tidewater episode was important, not 
only because the concern had large resources and 
made a strong fight, but also because it led ulti- 
mately to the material extension of Standard activ- 
ity and control. The war was carried on mainly 
through the railroad allies of the Standard, for 
they were most vitally concerned in its outcome. 
The pipe line to the seaboard threatened to rob 
them of the traffic which had become so profitable, 
and immediately freight rates were cut to kill it. 
Even to the general public the rates from western 
Pennsylvania to any one of the leading ports were 
dropped from one dollar and fifty cents a barrel 
to thirty and then fifteen cents. Such a fierce 
struggle could not last long. It was highly profit- 
able to the shippers, while it continued, but it 

187 



THE STORY OF OIL 

soon exhausted the resources of the Tidewater 

Company and forced a capitulation. 

This outcome served still further to strengthen 
the position of the Standard, for it ended the traf- 
fic war temporarily and led to the buildii . 

Standard trunk lines to the coast. The National 
Transit Company, a new subsidiary concern, was 

organized to control the pipe-line end of the busi- 
ness, and, with its seaboard trunk lines complete.!, 
the standard became entirely independent of the 

railroads which had aided it so long and faithfully. 
The construction Of trunk lines also placed tin 1 

Standard on essentially the same footing which it 
now holds. Subsequent events have been confined 
largely to growth along the lines then laid down 
and to extending its operations to keep pace with 
a rapidly expanding industry. Only onrr since 

then has an important rival appeared, in the form 

of the United states Pipe Line Company, organ* 
ized among the independent operators by Lewis 
Emery in 1890, Every possible obstacle was placed 

in the way of this line during its const met ion. 

to an armed encounter between employees of the 

pipe company and those of a New Jersey railroad 
which was trying in all ways to block the route to 

the coast. The line, however, was eventually put 
through after many delays and difficulties, and 
now, under the Operation of the Pure Oil Com- 
pany, it, with its modest five or six hundred miles, 
is the sole pipe-line competitor of the great Stand- 
ard system in the eastern part of the country. 

188 






GREATEST CORPORATION IN THE WORLD 

Serious legal difficulties as well as business rivals 
have also constantly beset the path of the Standard 
interests. In 1872 and in 1876 its methods were 
investigated by committees from Congress. Bitter 
complaint against its monopoly was made by the 
independent operators of Pennsylvania in 1878, 
with an appeal to the governor for some legislative 
action. Public feeling ran so high that officers of 
the company were hanged in effigy in Titusville, 
and processions of masked men besieged the com- 
pany's local offices. The Standard Oil Trust, a 
new form of organization adopted in 1882, was de- 
prived of its charter and dissolved by the Ohio 
courts for various offenses ten years later, while 
recently it has received widespread consideration 
as a violator of state and federal laws. Resent- 
ment in Kansas was so keen in 1904 that the legis- 
lature appropriated several hundred thousand 
dollars to establish a rival business. In Illinois, 
Tennessee, Louisiana, Missouri, California and New 
York, thousands of indictments have been returned 
on one count or another, one trial for acceptance 
of rebates resulting in the famous fine recently set 
aside on technical grounds by the Court of Appeals. 

Despite all opposition, however, the Standard 
has continued to prosper and has persistently fol- 
lowed the same policy of extending its operations 
wherever oil is found. No matter how great efforts 
might be required of it in the pursuit of this policy, 
the company has never hesitated, for only by un- 
ceasing activity and overcoming every obstacle 

189 



THE STORY OF OIL 

could the Standard control of the business be kept 
intact. 

When the rich McDonald district in southwest- 
ern Pennsylvania was opened in 1891, for exam- 
ple, the production rose from 50,000 barrels month- 
ly to over 1,800,000 barrels five months later. The 
Standard pipe lines, the only ones there, had a 

capacity of about 3,500 barrels a day at the be- 
ginning of duly, 1891, when the daily production 
was probably not more than half that amount. 
During duly, however, the Hood of oil appeared, 
sending the production upward at an unheard of 
rate. The Standard had to take care of it ; and 
how well they rose to the emergency can be 

from the fad that in six weeks their pipe-line 

capacity was increased to over 26,000 barrels and 

in six months to over 90,000 barrels a day. This 

tremendous expansion in such a short time meant 
far more than the mere placing of equipment and 
setting it to work. It meant also work night and 

day in boiler shops and rolling mills to turn out 

the necessary tanks, boilers, engines, pumps and 
pipes; stupendous efforts which no number of small 
concerns could have commanded satisfactorily. 
Control of transportation facilities has always 

been one of the chief sources of Standard sue 
Railway rebates and discriminations gave tin 1 
Standard its original hold on the business. By 
allowing it to sell for prices where others could not 
make a profit, the Standard practically held control 
of transportation between the refinery and the con- 

190 



GREATEST CORPORATION IN THE WORLD 

sumer. Later on in its development, the acqui- 
sition of pipe lines added also the control of the 
equally important link between the refinery and 
the producer. This policy of controlling trans- 
portation has necessitated the addition of pipe line 
after pipe line, until now the Standard owns over 
40,000 miles of pipe, covering all the fields from 
Kansas to the coast, with great trunk routes to 
the refineries. The one important line in Cali- 
fornia belongs to the Standard. Only in the Gulf 
field is there any extensive competition by inde- 
pendent pipe lines. 

This complete control of crude-oil movement has 
been used in a variety of ways to stifle competition, 
but principally through the refusal to transport or 
sell crude oil to independent refiners. State laws 
in general have declared the pipe line to be a com- 
mon carrier, hence legally required to transport oil 
for any shipper requesting the service. Being the 
only carrier has also made the Standard the chief 
buyer and hence the chief seller in the Eastern lo- 
calities. It has, however, frequently been accused 
of refusing absolutely to sell crude oil to outside 
interests or having so restricted the amount as to 
make refining unprofitable. Furthermore, by re- 
fusing to deliver at the required point, by charg- 
ing outrageous rates, or by refusing to carry at all, 
in direct defiance of the law, the Standard is said 
to have prevented independent concerns from se- 
curing oil of outside dealers. 

The pipe line has been an equally valuable aid to 
191 



THE STORY OF OIL 

the Standard in developing its efficient arrange- 
ment of refineries and distributing systems. No 
refiner who is dependent on railroad transporta- 
tion for his crude oil can nowadays hope to be an 
important factor in the business. Refiners not af- 
filiated with pipe-line service must locate near the 
wells from which they can buy their supplies and. 
as a result of this location, they find themsel. 
either restricted to the small markets of neighbor- 
ing districts, or els.- forced to pay comparatively 
heavy freighl charges on the long hauls of distilled 
products to the leading markets. Through its pipe- 
line system the Standard, on the contrary, has been 
able to chocs.- strategic positions near important 
industrial and commercial centers for the location 
of its refineries. It has been possible, at the same 
time, to replace many small establishments by I 
single plant where all the economies of large-scale 

operations can he secured. 

The large refineries are fully equipped to per- 
form all sorts of subsidiary operations. Barrels 
and boxes are manufactured by the hundreds of 
thousands from lumber grown on the company V 

own tracts. Thousands of tin cans for H case oil ' 
are turned out daily without a human hand touch- 
ing* them from the time the sheets of tin are 

crimped until the completed cans are ready to he 
filled with kerosene for shipment. (Hue. chemicals 
to be used in refining, paint, gianl pumps for its 
pipe lines, even lamps and wicks are made in the 
Standard's works. The Standard buys nothing 

192 



GREATEST CORPORATION IN THE WORLD 

that it can make as well. Such is the result of 
concentration. 

The two hundred and fifty refineries operated 
in this country thirty-eight years ago, when the 
first Standard Company was incorporated, have 
decreased to less than a hundred. The Standard 
controls only a score of the largest. Their lo- 
cations are significant when compared with the 
original locations of Standard activity. Seven, 
including the largest two, are located near the im- 
portant Atlantic ports, New York, Philadelphia 
and Baltimore, the one plant at Bayonne, N. J., 
covering nearly a square mile and employing over 
6,000 men. A half dozen smaller plants are scat- 
tered through the Appalachian region and the 
Ohio-Indiana field. The huge establishment at 
Whiting, Indiana, is at once convenient to Chi- 
cago and for distributing to the great middle west 
and south. Others in Kansas, the largest at Neo- 
desha; in Texas, at Corsicana and Chaison; at 
Florence, Colorado, and at Port Richmond, Cali- 
fornia, complete the access to every important sec- 
tion of the country and for all lines of foreign 
trade. 

The location of Standard refineries has greatly 
facilitated the perfection of a system of bulk dis- 
tribution of petroleum products by means of tank 
stations and tank-wagon deliveries direct to the 
consumer. It has, in the same way, been of great 
assistance in killing competition. Eliminating the 
middle man by selling direct to the retailer or con- 
14 193 



THE STORY OF OIL 

sumer opens the way to all sorts of price discrimi- 
nations. Selling at a loss in a competitive market 
to cripple a rival can then be recouped immediately 
by charging correspondingly higher prices in non- 
competitive districts. In the face of such advan- 
tages and methods, any rival must have enormous 
resources at the outset in order to wage sue 
fully the inevitable "oil war," if it desires to ex- 
tend its operations. 
It is remarkable that all through the discussion 

of Standard power and success there is no mention 

of a monopoly of production. The so-called an- 
thracite-coal trust owns or controls many of the 
mines, and the steel corporation controls the rich- 
est of the iron-ore deposits. Bui the " oil Trust," 
greater than either, strange as it may seem, lias 
never made any concerted efforl to secure gen- 
eral possession of the oil wells. In fact, the Stand- 
ard had been thoroughly established in its monop- 
oly of the refining business long before it entered 
this field of activity at all. 

The rapid developments of the Lima- 1 ndiana 

field from 1886 onward, offered the Standard a 

chance to secure a large interest in the district for 
almost nothing. The character of the oil made it 
useless to existing refineries as they had no means 
of removing the sulphur. The prices were, there- 
fore, so very low that the producers and own< 
of property were glad to sell to the Standard, 
winch had been steadily carrying on costly experi- 
ments in refining in tin 4 effort to get rid of the 

194 






GREATEST CORPORATION IN THE WORLD 

sulphur and secure a desirable kerosene. Such a 
favorable opportunity for acquiring valuable prop- 
erty at low prices could hardly be allowed to pass, 
especially since the experiments promised ultimate 
success and the Standard secured large holdings. 
Since then the Standard has continued to be an im- 
portant producer, other wells having been added 
from time to time, mainly in the Appalachian and 
the new Illinois field. The annual output from the 
Standard wells, however, does not even now rep- 
resent more than a third or, at the very most, a 
half the total in these Eastern fields, and prob- 
ably less than one fifth the total for the whole 
country. 

The reasons for this apparently contradictory 
policy of struggling to dominate the refining end 
of the business and neglecting the sources of the 
crude material are clear enough, and show the wis- 
dom of the Standard management. If it so desired, 
the Standard could undoubtedly acquire the same 
degree of control over production as it enjoys 
over refining and selling, but monopoly owner- 
ship of a natural resource w r ould be likely to raise 
a terrific storm of the most bitter public opposition. 
By following its present course and posing merely 
as a buyer and seller of oil, with nothing to pre- 
vent the entrance of competitors into the field, the 
Standard points to its superior ability, efficiency, 
and economy as the sole basis of its success. All 
the time, however, it enjoys in fact a very effec- 
tive control of production through its ownership 

195 



THE STORY OF OIL 

of the only efficient means of transportation. The 
element of risk in production has also been an im- 
portant factor in influencing the Standard policy. 
By leaving all the risks of prospecting, drilling, 
and operating to individual producers, the Stand: 
ard runs none of the many chances of heavy loss on 
unprofitable ventures. When everything is consid- 
ered, owning the refineries and pipe lines is 
more profitable and every whit as effective as own- 
ing the wells. 

The name of the Standard Oil Company com- 
monly suggests to many persons something more 
undesirable than desirable. In the stress of vio- 
lent competition, the Standard may have been 
guilty of many faults, bul the impression thai it 
is wholly had is the work of ;i few sensation mon- 
gers. There is something of good even in the 
Standard Oil Company. Thus there arc many 
reasons for believing that the development of such 
a tremendously powerful company has alone made 
possible strides of progress far in advance of what 
could otherwise have been expected. The besl evi- 
dence on this point comes from the foreign fields 
where industries eeiitnries older have been Com- 
pletely distanced by the progress in this country, 
while those places in which the example of the 

Standard in centralizing interests is being most 
closely copied are rapidly coming to the front. 

Only such a company, hacked by great resources, 
could have supplied so promptly the equipment de- 
manded by the many sudden and rapid advances 

19G 






GREATEST CORPORATION IN THE WORLD 

in production, thereby helping to prevent the loss 
of large quantities of oil and saving the producer 
from profitless operation. Only such a company 
could afford to employ a great force of experts de- 
voting all their time to perfecting old and discover- 
ing new processes and products of refining. It is 




A Standard Oil Plant in the Far East. 



doubtful if many smaller companies working in- 
dependently could afford to sell their products any 
more cheaply. Only the immense company can op- 
erate plants to manufacture everything it needs, 
from thousand horse-power triple-expansion pumps 
down to tin cans and lamp wicks for the Chinese 
trade. Buying outside means heavier expenses, 
and hence either lessens profits or raises prices. It 

197 



THE STORY OF OIL 

is very doubtful if the existence of a Dumber of 

smaller competing companies would insure the high 
standard of quality which is always insisted on by 
the much-maligned k * Trust." Vigorous rivalry, if 
long continued, is too prone to lower standards 
and, in the use of petroleum products, of all things, 
reliability is absolutely necessary for public safely. 
This reliability must in Fairness be credited to the 
Standard Oil Company. 

No loss powerful organization could have placed 
the foreign trade in petroleum products where it 

is now. Certaibly no less power could have main- 
tained, indeed, actually increased this foreign 
trade against the ever-growing competition of other 
countries. The Standard is not merely an Ameri- 
can concern; it is world wide in its scope and ac- 
tivity. It may have stilled most of the competition 
at home, hut it has also doggedly fought for and 
kept an immensely valuable trade abroad, thereby 
affording a ready market for millions of barrels of 
oil which could find no sale at home, and aiding 
materially in holding the much-coveted u balance 
of trade " for this country. It is even an open 
question whether stifling competition, the chief 
charge against the Standard, has been such a seri- 
ous offense after all. 

The growth of such a gigantic petroleum in- 
dustry as now exists in this country, and the suc- 
cess of the great corporation depending on it, have 
been accompanied by the accumulation (A^ sudden 
and enormous fortunes. Much has been said of 

198 



GREATEST CORPORATION IN THE WORLD 

late years about the excessively high profits of the 
Standard Oil, and "forty-eight per cent, dividends " 
has become a sort of call to battle for those who 
would destroy everything that makes for progress. 
The fact is commonly ignored that the Standard 
capitalization of $100,000,000, in round numbers, 
does not represent anywhere near the recognized 
value of the tangible property owned by the com- 
pany. If the capitalization were increased to half 
a billion dollars and the present earnings paid in 
dividends on that basis, no comment would be 
excited; in fact, Standard Oil would very likely 
be considered a rather poorly paying industrial 
stock. Yet not a few of the large business inter- 
ests of the country at the present time are paying 
moderate dividends on a capitalization which bears 
a ratio of not less than five to one to the real 
value of property owned. Enormous Standard 
dividends, however, have not been the only source 
of fortunes in the oil business. Before the Stand- 
ard idea was even formulated, comfortable for- 
tunes were made in the oil fields, and large for- 
tunes are still being made entirely outside the 
sphere of that concern. In fact, the idea of large 
returns is so universally associated with oil oper- 
ations that the expression to ' ' strike oil ' ' has come 
to be synonymous with suddenly acquiring wealth. 
It may be safely said that, first and last, more for- 
tunes have been made quickly through the petro- 
leum business than 'in any other single enterprise 
ever developed in this country. At the same time, 

199 



THE STORY OF OIL 

it is probably no less true that more fortunes have 
been lost in unsuccessful oil ventures than in any 
other kind of industrial operation. 

Rich returns have ever been the rule for the ones 
whose efforts were crowned with success. Heavy 
losses have borne down still farther those on whom 
a fickle Fortune refused to smile. Sudden wealth 
and equally sudden ruin have not infrequently 
been the double portion of the more adventurous. 
With few exceptions, however, it has been the 

successful ones who have made oil history, just as 
oil was the making of practically every man win 
name appears prominently in the chronicles of the 
industry. Nowhere during the half century is 
there a Leading figure coming to the industry with 
importanl resources already at his command; on 
all sides the guiding spirits are those which have 

" grown up with the business." Nowhere is this 
fact more strikingly illustrated than in the group 
of men dominating the standard Oil Company. 

John D. Rockefeller rose from an assistant hook- 
keeper in a Cleveland commission house at a sal- 
ary of four dollars a week; II. II. Rogers, from a 
clerkship in his father's store at Pairhayen, Mass.; 
John D. Archbold, son of a Methodist minister, 
from the general store at Salem, Ohio: Daniel 
O'Day, the great trunk-line organizer, from the 
freight yards in Buffalo; Samuel C. T. Dodd, the 
keen-witted legal adviser, father of the trust, from 
a printer's office in Franklin, Pa., where he worked 
to earn his way through college. 

200 



GREATEST CORPORATION IN THE WORLD 

While these men were still laying the founda- 
tions of later success, others belonging to the same 
class as themselves were rolling in wealth. When 
the oil boom in Pennsylvania was still in its in- 
fancy, incomes of $1,000 a day w r ere regarded as 
fabulous wealth, as indeed they were in those days 
before the modern age of millionaires. Yet such 
profits were not entirely unheard of in the years 
following 1860, when crude oil often sold for sev- 
eral dollars a barrel, and numerous wells averaged 
hundreds of barrels a day. It is easy to under- 
stand therefore, the irresistible temptation which 
drew so many young men from the four points of 
the compass to try their luck in the new venture, 
with its unlimited opportunities to rise rapidly. 
Those were the days of the spendthrifts and prodi- 
gals, when money flowed lavishly, as easily gained 
profits were spread right and left with open-handed 
generosity: the days of the " Coal Oil Johnnies." 

The original of this famous figure in oil history 
was in a way typical of an early class, indeed al- 
most of an early condition in the oil regions, but 
many of the marvelous tales about him, handed 
down to later years, are impossible, distorted prod- 
ucts of fertile imaginations. " Coal Oil Johnny," 
for such a person actually lived, was one John W. 
Steele, the adopted son and heir of the widow 
McClintock, on whose farm a number of the early 
productive wells were located. By her sudden 
death in 1863, Steele, then barely of age, found 
himself the possessor of apparently unlimited 

201 



THE STORY OF OIL 

wealth, which the wells were pouring out for him 
in an endless stream. It is scarcely to be wondered 
at that such unexpected riches turned the boy 9 i 

head and started him out to spend his money in a 
way which soon led to the wildest dissipation. For 
a year he was the sensation of the region, where 
men were living daily in an atmosphere o£ constant 
sensations. For a year Bel f -a vowed friends openly 

robbed Or secretly swindled the unsophist icat ed 

youth, until, with money and property gone, the 
Friends left him to sock a living as baggage master 
at a small local station on the Oil Creek Railroad. 
The unwelcome notoriety which he had gained, how- 
ever, soon drove him into the greal unquestioning 
west, and removed from the oil Gelds its most spec- 
tacular character. Some chronicles would have it 
that Steele spenl millions of dollar^ in his brief 
course as a spendthrift, but it is highly improbable 

that his whole squanderings much exceeded half a 
million. 

" Coal oil Johnny " represents one type of man 

which the oil business produced, his sort being 

confined largely to the group of early well owners, 
to whom great profits came quickly: men of whom 

much has been told and written, but whose service 

to the petroleum industry was small. The other 
type is represented by the sober habits and indus- 
trious lives of such men as Standard Oil has 
listed in its service. To these men, working hard 
in the interests o\' oil refining, wealth came more 
slowly but all the more surely. To them the pro- 

202 



GREATEST CORPORATION IN THE WORLD 

ducer has always owed much, for their untiring 
efforts to increase the consumption of petroleum 
products have benefited both refiner and well 
owner alike. Many men have been arrayed in the 
rank and file of oil operators, each contributing 
in his own small way to the progress of a vast en- 
terprise. Due credit must be given to the few 
trail blazers, Kier, Eveleth and Bissell, Drake and 
his faithful helper, " Uncle Billy " Smith. But 
the real makers of oil history are to be found, in 
general, among the men most intimately associated 
with its greatest corporation. The man who dis- 
covered the rich McDonald field, for example, 
stands in the same position as a scout who locates 
from afar the camp of the enemy; the corporation 
taxing its utmost strength to meet the emergency, 
stands as the powerful army which gains the vic- 
tory in battle and follows it up to the fullest ad- 
vantage. Behind this army have stood always the 
same small group of masters of strategy and re- 
sourcefulness, the guiding spirits of oil destinies 
in this country. 



CHAPTER XI 



BAKU — DTK ONLY RIVAL 



The Russian oil fields on the western shore of the 
Caspian Sea are the only ones, so far as is now 
known, where it would be possible to approach the 
magnitude already attained by the industry in this 
country. In fact, before the great discoveries in 
California and Texas, Russia actually did lead the 
world in petroleum production for a time, and 
might still do so perhaps, if domestic uprisings had 
not dealt several severe blows to the industry. V«t 
the two regions, Russian and American, are as un- 
like as possible. The American production comes 
from relatively large areas scattered over the en- 
tire country. The Russian production, on the con- 
trary, comes from an area of only a few square 
miles, containing less than 3,000 wells, or only 

about one-tenth the number operated in the single 
state of Indiana five years ago. Nowhere else in 
the world has any equal area yielded such enor- 
mous quantities of oil for such lon£ periods of 
time. In this one respect, at least, not even the 
United States can surpass the Russian district. 
The modern Russian industry centers at Baku, 
204 



BAKU— OUR ONLY RIVAL 

on the Apsheron peninsula, where Persian legend 
says that petroleum workings have existed for 
nearly three thousand years. The period of Rus- 
sian possession, however, extends back only to the 
beginning of the last century, since which time 
more or less oil production has continued. Most 
of this Russian period of ownership is covered by 
the imperial monopoly, the revenue from the oil 
workings being turned into the royal treasury. 
Part of the time the government worked the oil 
springs, though, for the most part, the govern- 
ment contented itself with regulating the selling 
price of the oil and receiving a bonus on all sales. 
The actual operations were then farmed out for 
a term of years to the highest bidder or to some 
court favorite, who paid for the privilege a stipu- 
lated annual revenue. Under this system the pro- 
duction rose as high as 1,500,000 gallons a year, 
yielding the government an income of 160,000 
roubles. 

This imperial monopoly seriously hampered the 
proper development of the industry until about 
1872, when the government decided to open the 
region to private enterprises. The district was ac- 
cordingly surveyed in plats of twenty to thirty 
acres each, their values appraised, and they were 
then sold to the highest bidders. Much attention 
had already been attracted toward the field by the 
previous developments and the possibilities in 
sight, so that the bidding was often spirited. Plats 
officially appraised at a few roubles each were 

205 



THE STORY OF OIL 

taken eagerly at a price two or three thousand 
roubles higher, thus following out the rule of arti- 
ficial land values created by prospects of oil. 

The real beginning of the Russian industry dates 
from this admission of private enterprises, but the 
general condition of affairs at Baku for some years 
after 1S72 makes a sorry comparison with the flour- 
ishing business then firmly established in this 
country. The primitive methods of open pits and 
shallow dug wells were still in vogue; in fact, 
drilled wells had apparently never been heard of. 
The oil was tediously pumped out by hand or by 
horse power and stored in underground pits. What 
refineries there were hardly deserved the name, on 
account of their inferior products. The lighter 
products of distillation had no important uses and 
were frequently allowed to run into the Caspian, 
while the residuum or astatki, entirely useless, ac- 
cumulated at the refineries and was periodically 
disposed of by burning in open pits. The only 
means of shipment were overland in the slow, 
clumsy, high-wheeled native caiis or arbas, or by 
boat across the Caspian and up the Volga, thus 
greatly limiting the market. Barrels in a country 
completely devoid of timber cost so much that they 
were often more valuable than tl ! contents. While 
to complete the burden, the government imposed 
an excise tax on the oil, and brought the whole in- 
dustry to the verge of collapse. 

It is not strange, considering the adverse circum- 
stances, that the Russian industry rose slowly. 

206 



BAKU— OUR ONLY RIVAL 

The real cause for wonderment is that it developed 
at all. Before 1880 the entire output scarcely ever 
exceeded 3,000,000 barrels a year. At that time, 
the Pennsylvania field alone was producing ten 
times as much as the Russian wells, and American 
oil was being carried thousands of miles to be 
sold in the cities of western Asia, in St. Peters- 
burg and Moscow, under the very eyes of the Rus- 
sian operators. But out of the seemingly hopeless 
depression there gradually loomed signs of sal- 
vation. 

American methods of drilling and boring were 
introduced and paved the way for increased pro- 
duction as soon as other conditions were favorable. 
Astatki was successfully used as fuel, and the pop- 
ular clamor against its dangerous character was so 
conclusively disproved that it was adopted for 
practically all the craft on the Caspian Sea. The 
lighter products began to find various uses in 
manufacturing processes, materially improving 
conditions for the refiners. The government re- 
moved the burdensome excise tax. Perhaps most 
important of all was the entrance of the Nobel 
brothers into the field, bringing with them western 
ideas, ingenuity and energy. These men of Swed- 
ish descent, seein ; into the future, realized the 
possibilities of the Russian industry and immedi- 
ately turned their efforts into improving every as- 
pect of the business: the methods of production, 
refining, transportation, and securing markets for 
their products in competition for the lucrative 

207 



THE STORY OF OIL 

trade which the Americans had enjoyed unmo- 
lested so long. 

When the Nobels entered the refining business 
in 1875, they realized clearly that the existing 
transportation facilities would never allow any 
profitable development and that the first thing to 
be done was to devise something better. All 
handling of crude oil between the wells and the 
refineries was done in the clumsy, high-wheeled, 
native carts, driven by Tartars and Persians. 
Scarcely a track in the whole district was lit to 
be called a road, and every rain temporarily 

Stopped all transportation. The native drivers 

often struck at the busiest time of year, making a 
condition of affairs far worse than there had ever 
been in the Pennsylvania Gelds. Baku had no 

railroad connections of any kind; in fact, no rail- 
road approached within hundreds of miles of the 
place; the nearest seaport was over 500 miles 

away and, for all commercial purposes, as inacces- 
sible as if it had been ten times as far; foreign 
trade was, therefore, entirely out of the question; 

the only access to domestic markets was limited to 
the water route through Astrakhan, via the Cas- 
pian and the Volga river, and even that outlet was 
closed from November to February of every year 
by ice in the North Caspian ports and in the river. 
With so many handicaps to overcome, none but 
the most resolute would have dared hope for large 
successes. The American success with pipe lines 
offered a solution for part of the difficulties; and 

208 



BAKU— OUR ONLY RIVAL 

the first line, eight miles long, was built by the No- 
bels to supply their refinery. The line proved to 
be such an unqualified success, in spite of the op- 
position, that others were quickly laid, while the 
idea of a trunk line to the Black Sea was widely 
discussed. Such a line w T ould undoubtedly have 
followed soon if it had not been for unyielding 
government opposition. 

The entire absence of any means of export trade 
by sea meant that practically the whole consump- 
tion of oil outside the immediate Caspian district 
must be confined to Russia, and to those localities 
in Russia accessible by the Volga, its canals and 
tributaries, and by the Russian railroads. An 
elaborate distributing system, therefore, was the 
only means which would build up a wider market 
and allow the industry to expand. The Nobels 
again led the way. A large fleet of tank steamers 
was introduced to carry the products of their re- 
fineries to the mouth of the Volga, where trans- 
shipment was made to river barges for shallow- 
water navigation. Important distributing centers 
with great storage reservoirs were established in 
convenient places, where large supplies brought by 
barges via Astrakhan and then by rail from 
Tsaritzin could be accumulated during the season 
when the ports were ice free. 

From such important points as Orel, Moscow, St. 

Petersburg, Warsaw, and Saratoff, the oil was 

readily distributed throughout the surrounding 

country to supply the heavy demands of the win- 

15 209 



THE STORY OF OIL 

ter season. Occasionally shipments following this 
route found their way across the frontier into Ger- 
many or from Riga across the Baltic to Scandi- 
navia. Bui the main consumption was at home. 
Kerosene was in great demand wherever it could 
be secured, while astatki, after it had been adopted 
for fuel for all vessels on tie- Caspian, began to he 
used generally on locomotives, and. by its cheap- 
ness and abundance, it led many industrial estab- 
lishments to locate in the Volga district. At every 
point the Nobels were the leaders in placing the 
business on a profitable basis, their persistenc 
sticking to innovations never failing even in the 
face of opposition from every other operator in tin* 
region, and generally being rewarded sooner or 

later by the silent approval of direct imitation. 

The building of the Trans-Caucasus railroad in 
1883, connecting Baku with tin* port at Batoum on 

the Black Sea. Tor the first time offered a conven- 
ient outlet to the sea and opened a vasl new field 
for the activities of the Russian operators. Where 
Baku oil before had been obliged to go over 2,000 

miles to Riga on the Baltic to he shipped by sea. it 

could now go only 560 miles to Batoum and reach 
a. " tidewater M port. The encouraging prospect of 
building up a profitable foreign trade gave the 
whole industry a new lease of life. Russian pro- 
duction immediately began to rise. 

About the same time the Rothschilds firm, a 
powerful English concern, appeared in the field 
with the avowed object of "producing, refining, 

210 



BAKU— OUR ONLY RIVAL 

transporting, and selling Russian petroleum." 
Wild rumors at once whispered that they intended 
to monopolize the entire industry and great con- 
sternation prevailed among the smaller operators. 
These fears proved ungrounded, however, for, like 
most of the investments of English capital there, 
the advent of the Rothschild company was of de- 
cided benefit. The firm greatly assisted the re- 
finers both by extending the market for Russian 
exports and by buying kerosene in large quantities, 
frequently paying in advance. These practices 
often carried operators over impending crises and 
made it possible to work when they otherwise could 
have done so only at a loss. 

The inevitable outcome of these progressive steps 
is easily foreseen. Batoum rapidly became an im- 
portant commercial town and one of the greatest 
oil ports in the world. Enormous storage tanks 
were established, a fleet of tank steamers was nec- 
essary to carry oil regularly to European ports, 
while tramp steamers from all nations began tq 
appear in the harbor. By 1885 Russia had to be 
considered as a rising factor in the world 's oil busi- 
ness, although the United States was still produc- 
ing nearly twice as much as all others combined. 
The railroad, at first fully capable of handling the 
oil traffic to Batoum, was quickly outgrown. 
Abundant capital, both Russian and English, stood 
ready, eagerly waiting for permission to construct 
a pipe line parallel to the railroad, for trunk lines 
to the seaboard in this country had enjoyed un- 

211 



THE STORY OF OIL 

qualified success and had greatly stimulated the 
whole industry. There was absolute certainty of 
success here, too, bul the authorities, fearing a 
decrease in the revenues of the railroad, the prof 
of which were guaranteed by the government, per- 
sistently refused to grant the necessary concession. 
Finally, however, in 1897, the congestion of traf- 
fic had become so serious a problem that the old 
conditions could he tolerated no longer and the 
government itself undertook the construction of a 
pipe line over pari of the route where ;i steep grade 
had always hampered the heavy traffic. The early 
example of the Nobels had, after many years, borne 
valuable fruit. This original section of pipe line 
was later extended, until now a continuous line 
about <*><)<) miles [ong connects Baku with its chiel 

port. BatOUm, ;is a result, has since come to he 

an important refining center as well as the ship- 
ping point, thus again following the example of 
the American industry in piping the crude oil and 

making the refined products at the point of ship- 
ment. 

The last important addition to the transporta- 
tion facilities was completed in 1898, when the 
main system of Russian railways was connected 
with Baku by a line along the Caspian shore. The 
water transportation during the open season is so 
much cheaper that the old regime continues to a 
large extent, hut the main advantage of the rail- 
road is in affording ready means of communication 
in winter. 



212 






BAKU— OUR ONLY RIVAL 

The location of Baku has, as a result of this 
gradual evolution, ceased to be a disadvantage. 
Quite to the contrary, its position now opens to it 
enormous areas where no other countries can suc- 
cessfully compete for the trade. The Caspian and 
Volga routes would be valuable assets for any oil 
field, affording as they do, for eight months of the 
year, thousands of miles of the cheapest kind of 
transportation to the centers of domestic consump- 
tion. The Trans-Caspian railway gives access to 
the market of immense areas in the provinces of 
Western Asia. The direct connection with the 
Black Sea offers unlimited possibilities abroad. 

Probably more than in any other field in the 
world, the development of the Russian industry 
has depended on these transportation facilities. 
Within one year after the railway to Batoum was 
opened the production increased by over 4,000,000 
barrels, w r here prior to 1880 the total production 
had rarely risen to a total of 3,000,000 barrels. 
Similar expansion continued during the succeeding 
fifteen years, rapidly advanced Russia to the posi- 
tion of a close rival of the United States, until this 
country was finally left far behind as regards the 
the amount of crude oil produced. But the most 
surprising part of it all is that this whole phe- 
nomenal growth came in the short space of twenty 
years, reckoning from 1878, the year when the re- 
moval of the government tax first made profitable 
operation possible. 

One other leading factor which has aided greatly 
213 



THE STORY OF OIL 

in the Russian expansion is tin' character of many 
of the wells. The introduction of American 
methods of boring was immediately followed by 
the frequent striking of gigantic gushers. Tap- 
ping the deeper strata, which the dug wells could 
not touch, almost invariably yielded oil in un- 
heard -of quantities. Nothing approaching th< 
oil fountains had ever been seen before; in fact, 
even the most conservative accounts of the wonder 
ful strikes seemed so incredible that the truth of 
the reports was generally doubted in this country ; 
and the Russian industry was badly demoralized 
for a time by the uncontrollable, unsalable quan- 
tities obtained. Wells spouting fifty, a hundred, a 
hundred and twenty-five thousand barrels a day 
were common occurrences. The heavy Baku oil 

carries with it a great amount of sand and often 

the most violent of these gushers destroyed or seri- 
ously injured surrounding property by burying it 

Under a deluge of sand and oil. Roads and lion 

were Hooded with oil, wells were blocked, and roofs 

gave way under the load of sand, while fearful 

conflagrations resulted from accidental ignition of 
the far-reaching spray or gas. But, in spite of the 
losses which have been incurred thereby, this flow- 
ing character results in a very much higher yield 
per well, approaching 100 barrels a day, or twenty 
to thirty times the average of wells in this country. 
By 1900 the Russian wells had increased so rap- 
idly that they were yielding more than half the 
world's supply of crude oil and exceeded the out- 

214 



BAKU— OUR ONLY RIVAL 

put in the United States by more than 12,000,000 
barrels. The succeeding years, however, brought 
in the enormous quantities from Texas and Cali- 
fornia, doubling the previous figures for the United 
States. At the same time domestic difficulties gave 
Russian expansion a severe setback. The turmoil 
incident to the war with Japan and civil uprisings 
affected the oil business perhaps more than any 
other industry. The accumulation of enormous 
stocks in storage, with no market, brought on a cri- 
sis just when the boom was well under way. Then 
followed the race war and massacres between Ar- 
menians and Tartars of the Caucasus district, in 
1905, during which sad havoc was wrought in the 
oil fields. Many of the wealthy and prominent 
Armenians were important oil operators and the 
Tartar frenzy was directed against their property 
as well as their persons. On all sides derricks, 
workshops, offices, and laborers' houses were 
wrecked. Fires were set and spread unchecked in 
all directions. In some sections the destruction 
wrought during the reign of terror was well nigh 
complete. Over a thousand wells were destroyed 
in the different districts; hardly more than half 
that number remained after the trouble was over, 
reducing the production to about one third of its 
former extent. 

The work of repairing the damage, however, be- 
gan as soon as the uprisings were quelled, the gov- 
ernment making loans to those who had suffered 
the worst losses, in order to hasten as much as pos- 

215 



THE STORY OF OIL 

sible the regeneration of the industry. Already 
the production lias begun to increase again. It 
has also been discovered that the productive lo- 
calities are of far greater extent than the area for- 
merly developed, hence there is every reason to 
suppose that the output will soon reach and sur- 
pass its former annual rate. In spite of its bur- 
dens, the Caspian district seems destined to be a 
persistent rival of the American oil fields. 

The successful development of this Baku indus- 
try is in many respects the most romantic chapter 

in the whole story of petroleum. Whatever has 

been accomplished there, has been done in the face 
of difficulties and natural obstacles unparalleled in 

any other oil held in the world. Situated in a des- 
ert, and separated by thousands of miles from the 

important centers of European and Asiatic popu- 
lation, it has had to create markets and means of 
reaching them before any growth was profitable. 

Drilling the wells even by the hrst modern meth- 
ods often entails difficulties and expenses many 
times in excess of the most costly operations in 

other localities. Ordinary pumping is impossible 

on account of the sand in the oil, so that in non- 
flowing wells, it is necessary to use a cumbersome 
bailer, consisting of a long hollow tube, with an 
automatic valve in the lower end. Gigantic push- 
ers not infrequently have brought to the operators 
practical ruin instead of riches, through the dam- 
age done. Every stick of timber used in the in- 
dustry dow r n to the very staves for barrels had to 

216 



BAKU— OUR ONLY RIVAL 

come, for many years, hundreds of miles down the 
rivers and across the Caspian. Even water for 
the boilers is scarce, that of the Caspian being salt 
and unsatisfactory. On top of it all has been the 
worthless character of the only labor to be had ; 
unreliable, inefficient, ignorant Orientals, imposing 
a constant burden on the industry. 

Yet in the face of so much that is disheartening, 
a great industry has been developed by sheer 
persistence; and Baku now links the dim past to 
the most advanced ideas of to-day, sharing alike 
in Oriental and western civilization. This an- 
cient desert town has risen from obscurity to 
world fame. Prom the home of medieval Persian 
Khans, it has come to be the home of modern oil 
kings — Armenian millionaires who, perhaps, can 
scarcely read or write. Modern streets, stores, of- 
fice buildings, electric lights and telephones, fac- 
tories, and smoking chimneys, show the influence 
of the West. In strange contrast stands the an- 
cient city and all-pervading spirit of the East ; the 
clumsy w r ater cart and the camel train ; the palace 
of the Khans, the mosques and the towers of ro- 
mantic legends. It is everywhere a confusion of 
the old and the new, of East and West on the 
threshold of modern civilization. Petroleum has 
performed many wonders, but none greater than 
this. 

The United States and Russia stand alone in the 
petroleum industry, the latest statistics crediting 
them with seven eighths of the total for the world. 

217 



THE STORY OF OIL 

Of this, the United States produced five eighths, 
and Russia the other two eighths. A great many 
other countries produce some petroleum, but only 
a few of them have attained any real commercial 
importance. The Dutch Bast Indies, Galicia, Rou- 
mania, India, and Japan have risen to the distinc- 
tion of exceeding 1,000, 000 barrels a year, while 
Canada, Germany, Peru, Italy, and various others 
eke out a million between them. Yet two of these 
countries, India and Canada, have each enjoyed 
for a time the honor of being probably the great- 
est producing locality in the world. 
The Burman oil fields in the [rrawady valley 

Were Supplying oil to the whole of the empire he- 
Tor the beginning of the lasl century, and seme 

time after thai the production was estimated at 
several hundred thousand barrels yearly. This 
quantity is many times greater than was ever 
reached by the Russian fields during the early 

days of the government monopoly, so that the Iiur- 
man supply a hundred years ago was undoubtedly 

the greatest in the world. At the present time, 

the industry is carried on in two localities, the 

Largest in the [rrawady valley south of Mandalay, 
the source of the so-called " Rangoon oil." the 
other including the Arakan Islands and a section 
of the neighboring coast. The combined produc- 
tion in the two areas is about equal to that of the 
Louisiana field, the recent introduction of modern 
appliances having* tripled the output inside of 
three years. 

218 



BAKU— OUR ONLY RIVAL 

Oil wells were sunk in the western part of the 
province of Ontario from about 1857 onward, and 
a few years later this portion of Canada w T as prob- 
ably the most productive region in the w T orld. 
Some of the wells yielded six to seven thousand 
barrels a day in 1862, the supply being so great 
that there was practically no sale and ''millions of 
barrels flowed off into the creeks.' ' But the lead- 
ership was short, for the Pennsylvania fields soon 
rose to much greater prominence at the time of the 
Pithole craze, while the Canadian supplies steadily 
diminished. The yields in recent years have been 
only a fourth or a fifth of what a single well was 
producing in the early days. Indications afforded 
by developments in the Northwestern provinces, 
however, point to the possibility of Canada in the 
future rising once more to something like its orig- 
inal rank. 

The commercial development of the petroleum 
deposits in the Dutch East Indies is entirely of 
recent origin, in spite of the fact that the natives 
appear to have used it for centuries. In view of 
the Dutch system of colonial administration for 
revenue, it is strange that the oil fields were prac- 
tically untouched until about twenty years ago in 
Java and Sumatra, and ten years ago in Dutch 
Borneo. The deposits in Sumatra are located on 
the northeast coast, and in Java on both north and 
south coasts ; but all of these fields are less impor- 
tant than the South Borneo district, which began 
with a giant gusher in 1898. The rapid growth 

219 



THE STORY OF OIL 

of the industry in these Dutch possessions lias, in 
the last decade, placed them ahead of the much 
older fields of Qalicia, Roumania, India, and Ja- 
pan. The abundance of the available supplies hi 
of course, had much to do with this encouraging 
growth, hut the rational system of development has 
been an equally important factor. With charac- 
teristic Dutch foresight, the mosl up-to-date ap- 
paratus was brought from the United States bef< 
work was begun, and all the important develop- 
ments were undertaken by large interests havii 
sufficiently abundant capital to carry through the 
necessary trial borings. Pew indeed are the plac 
where oil prospecting has been undertaken in such 
a thoroughly businesslike manner. Success was id- 
most inevitable under the circumstances and the 
Dutch supplies have deservedly come to he a decid- 
edly important factor in the oil trade of the Orient. 

Qalicia and Roumania both antedate the United 

States in the oil business, Qalicia at least having 
been the scene of distilling operations a hundred 
years ago. The Canadian system of boring wells 
was introduced into the Galician field at an early 
date, hut bored wells were nol genera] until com- 
paratively recent years. Even now some of the 
supply comes from the old shallow wells dug by 
hand. The Roumanian localities especially were 
hampered by the mountainous character of the 
country with bad roads and railroads entirely want- 
ing. Neither country had risen to a production of 
1,000,000 barrels annually until about twelve years 

220 



BAKU— OUR only RIVAL 

ago, when new discoveries is Galicia rivaled for 8 
time the rich strikes al Baku and in this country. 
The output was more than doubled, rising to Dearly 
2,500,000 barrels in 1896, since which time it has 
increased over 1 lireefold. 
The important Roumanian development has 

come entirely within the hist ten years ;is the re- 
sult of introducing bored wells, pipe lines, and 

modern refineries, in which American capital was 
largely interested. Now the Roumanian produc- 
tion is ten times greater limn it was a decade ago. 

Then it was only a third as nnieh as the (Jalieian 
yield ; now it stands a elose second, hut the yield of 

neither country is equal to the output from the old, 
worn-out localities in Pennsylvania. Neither dis- 
trict has important markets outside of European 
count ries. 

Japan is the only other country in which the 
industry has risen to the dignity of producing 
1,000, ooo barrels in a single year, or what would 
be about the total from two-score average Rus- 
sian wells. The Japanese industry has been in 

existence over 1,200 years hut it had to wait for 

American operators to raise it out of the rut where 
it had lain dormant Tor centuries. In spite of its 
recent, developments in answer to this American 
stimulus, however, the Japanese industry is decid- 
edly insignificant, even from the standpoint of do- 
mestic consumption. At the present time the im- 
ports of American kerosene alone exceed the whole 
yield of crude from the local industry. Japan is 



THE STORY OF OIL 

truly a nonentity in the petroleum business, when 
compared with other even third-rate countries. 

The six countries, United States. Russia, Dutch 
East Indies, Galicia, Roumania, and India, produce 

approximately ninety-nine per cent, of the world's 
total supply of petroleum. A score of other placet 
contain petroleum deposits of varying extent, and 
small quantities are secured for local consumption 
in most of them. In this class are found Mexico. 

Germany, Peru, Italy, Turkey, Persia, Egypt, Al- 
geria, the Punjab, New Zealand, and Formosa] 
some of these places may become greal producers 
in the future, hut at present they do not begin to 
supply more than a small portion of the purely 
local needs. 

The United States BO far stands in a class en- 
tirely })v itself, having led the world for nearly 
half a century, unbroken except for the three years 
of Russian leadership just before the Texas and 
California developments began. Russia alone, at 
the present time, can be regarded as a worthy rival. 
None of the other countries have as yet passed the 
stage which this country had reached forty years 
ago. Discoveries similar to those in Texas and Cal- 
ifornia may, of course, at any time, raise some ob- 
scure locality from insignificance to the foremost 
rank in the space of a few years. The petroleum in- 
dustry is, above all else, a thing of sudden changes. 
Yet, in the light of all present knowledge, Russia 
is the only rival which appears likely to threaten 
American supremacy in the immediate future. 

222 






CHAPTER XII 

THE STRUGGLE FOR THE WORLD 's TRADE 

Twenty years ago an Englishman described the 
striking of the famous Droojba gusher at Baku, 
concluding his description with this highly amus- 
ing statement: " After that, America, the country 
of 'big' things, may well hide her diminished head. 
There is really no comparison between the two oil 
regions. The yield of Baku licks America as com- 
pletely as the yield of America licked the shale 
oil yield of Scotland. The Americans are no longer 
in it." The American industry, however, has per- 
sistently refused to stay " licked' ' either in the ex- 
tent of its production or in the expansion of its ac- 
tivities. An unceasing campaign, waged in all 
quarters of the globe to secure and maintain im- 
portant markets for the products of American pe- 
troleum, has given this country a greater industry 
than all the rest of the world combined. 

This struggle for the world's trade has been one 
of the chief features of the industry in recent 
years, the American domination of foreign markets 
having been entirely undisputed until after the 
completion of the Caucasus railroad and the rise 

223 



THE STORY OF OIL 



of Baku about 1883. The American export trade 
in petroleum products had then been established 
more than twenty years and included practically 
every important country in the world. The for- 
eign trade from this country really dates from the 
latter part of the year 1861, when the shipping 
firm of Peter Wrighl & Sous, of Philadelphia, cre- 
ated a sensation by announcing the chartering of 
a brig, the Elizabeth Walls, to carry a cargo of oil 
in barrels to Loudon. Some odd shipments of a 
few barrels or cases had been sent abroad prev- 
iously, largely through the efforts of the American 
consul at Antwerp, bul this was the first full cargo 
to leave an American port. 

The sudden arrival of such a quantity of petro- 
leum in the British market caused a slump in 
prices so severe that the shippers hist money on 
the venture. The experiment ultimately proved ;i 
good investment, however, since it sufficed to intro- 
duce the oil and create a demand tor it. Other 
cargoes followed this lead; shipments increi 
rapidly; and new* regions were tried one after 
another with such universal success that within 
two years oil was being sent to practically every 
port in Europe, to Egypt, the Orient. Easl Indies. 
Australia, New Zealand, and all the countri- 

the Western hemisphere. From the first small 
cargo carried by the Watts, the exports had grown 

to nearly 800,000 barrels in 1864. This growth 
is all the more remarkable in view of the facts 

that the total production of crude oil then barely 

224 






STRUGGLE FOR THE WORLD'S TRADE 

exceeded 2,000,000 barrels annually, and not a rail- 
road or a pipe line existed in the oil fields of 
western Pennsylvania, while all commerce from 
Northern ports was more or less hampered by the 
activities of Confederate cruisers. 

Great Britain, France, Netherlands, and Ger- 
many were the largest buyers, though fully half 
the total was distributed in smaller amounts among 
fifty or more other districts. The Americans were 
wisely laying a broad foundation for an immensely 
profitable trade, and gaining firm footholds which 
were to prove invaluable in subsequent competi- 
tion. But no ripple of the coming struggle was 
yet visible. The world, quickly alive to the ad- 
vantages of the new means of artificial light, con- 
tinued to demand constantly increasing quantities 
of oil. Increased production in this country stead- 
ily rose to meet the new requirements. Tank cars, 
then pipe lines and tank steamers lent their aid in 
facilitating foreign-trade development. The sea- 
port refineries sprang into foremost prominence 
and the American shippers prospered exceedingly. 
By 1870 the shipments had risen to over 2,500,000 
barrels and ten years later they had again in- 
creased fully fivefold. Half the output of the 
American wells was finding its way far and near 
to foreign consumers of every nationality. 

The flourishing Scotch and French shale-oil in- 
dustries had been practically killed by the cheap- 
ness and superior qualities of the American kero- 
sene. But the best idea of the complete control 
16 225 



THE STORY OF OIL 

of the illuminating-oil markel enjoyed by the 
American shippers appears in the trade to Russia 
and Asia Minor. Almost to the very time when 
the Caucasus railway was opened, Tiflis, less than 
350 miles from Baku, was using American kero- 
sene which had to be carried over 8,000 miles. 
In the early eighties the awakening Baku opera- 




A modern tanker : the chief factor in the Btruggle for 

the world's trade. 



tors began their attempts to introduce Russian oil 
into the important trade of Smyrna and oth< 
cities of the near East. Shipments made via Ba- 
tonni had to travel hardly a third the distance cov- 
ered by oil from this country, yet the American 
representative in Smyrna, as late as l^ s 4, assured 
the operators that there was no cause to fear any 
injury to their interests. 

226 



STRUGGLE FOR THE WORLD'S TRADE 

In Russia, too, the Americans had introduced 
their goods successfully almost to the very doors of 
the Baku region. Throughout western Russia the 
merchants found it cheaper to get their oil from 
America rather than from Baku. Whole cargoes 
were sold in Moscow, one of the most important 
markets in the country, and easily reached by the 
Volga route from the Caspian, while St. Peters- 
burg took over 100,000 barrels a year. 

Signs of an impending struggle, however, began 
to appear soon after the advent of the Nobels at 
Baku. The stress of circumstances which had kept 
down the Baku industry so long was gradually re- 
lieved. Baku operators were determined to have 
their rightful share of the oil trade. The Ameri- 
cans for the first time had a rival, a rival against 
whom they have had to struggle ever since, in in- 
creasing competition for the big markets of the 
world. 

All the advantage, of course, was at first on the 
American side, controlling as it did the whole oil 
trade, even to Russian centers themselves. The 
American industry was also thoroughly estab- 
lished, conducted by a powerful corporation, pos- 
sessing every known facility, and determined to 
continue its domination of the oil business. With- 
out the Standard concern, or a similar concern, 
the American interests in foreign markets would 
certainly have fared badly in the years since 1885. 
Individual companies could never have successfully 
established such a comprehensive and efficient sys- 

227 



THE STORY OF OIL 

tern of transportation and distribution to cover the 
whole world. Smaller companies working separ- 
ately could never have waged such a successful war 
for the oil trade under the very shadow of Russian 
territory. Great capital 1ms always given the 
Standard its chief advantage in the struggle for 
foreign trade; enormous resources have been the 
keystone of its success there no less than at home. 
Less powerful interests could scarcely have af- 
forded the time spent and expense incurred in 
pushing the trade as the Standard did from l s 7!> 
onward. The Standard lenders believed that great 
as the growth of the oil trade had been, it could 
ho made still greater, if the righl methods were 
adopted. With their usual wisdom they proceeded 
to investigate before acting and representativ< 
were sent to all parts of the world to study and re- 
port on the existing conditions. One important 
outcome was the breaking down of much local op- 
position, removal of official boycotts, and repeal of 
absurd duties and restrictions, which had com- 
pletely excluded the oil from numerous Oriental 

districts. Local officials, personally interested in 
the sale of native oils for illuminating, had in many 
cases, made the use of petroleum a capital offenc 
because it threatened their own revenues. A Hin- 
du would never trade with a Mohammedan agent or 
vice versa, while both hated a Christian, yet native 
labor was necessary in extending operations on ac- 
count of the multitude of languages spoken; and 
the solution had to be worked out on the spot. All 

22S 






STRUGGLE FOR THE WORLD'S TRADE 

through the East a multitude of such difficulties 
were overcome, in fact, are still being met and over- 
come, in expanding the market for American 
products. How it has been done in the face of 
deep-rooted Oriental prejudices and suspicions is 
the most wonderful part of all. 

No smaller concern could have taken advantage 
of the innumerable economies, large and small, to 
cut the cost of production and make it possible to 
place the oil in the markets of Europe or Asia as 
cheaply as it can be done from Baku or from Bor- 
neo. To do this the great marine department of 
the Standard Oil Company has been necessary,- 
making a connecting link between the shipping 
points on our coast and a distributing system in 
many foreign countries exactly duplicating the one 
here. A fleet of four-score steamers and sailing 
vessels, as well as a host of tugs and barges, has 
been organized by the Standard to carry oil in 
bulk, and dozens of other vessels are chartered 
annually from private owners. Bulk carriage has 
been half the secret of the success abroad as well 
as at home. 

Storage stations, or main distributing centers, 
have been established at seventy places in Europe 
alone. These central stations and a score of re- 
fineries supply literally thousands of interior de- 
pots and selling agencies, by means of tank barges, 
cars, and wagons. The same policy has been pur- 
sued elsewhere, East and West, North and South. 
American oil meets Burmese oil in Mandalay. Tin 

229 



THE STORY OF OIL 

cases, made in the refinery at Bayonne or Phila- 
delphia, find their way to the native lmts of Bor- 
neo and the Celebes; or, adorned with a dragon, 
make strong appeals to the Chinamen's fancy. 

The Standard admits no limits to its field of op- 
erations, except the limit beyond which man can- 
not penetrate. No region is so remote, no route so 




Tank Cart, Osaka. 



long or hard, no mountain pass so high, that Stand- 
ard oil may not find its way there in answer to a 
regular demand, until petroleum products have a 
wider sale than any other article of American com- 
merce. Everywhere the Standard has won its way 
first by carefully studying conditions to be met and 
then adapting its methods to the requirements of 
the individual locality. A typical example comes 

230 



STRUGGLE FOR THE WORLD'S TRADE 

from the Chinese trade, where the dense popula- 
tion held out alluring prospects if the market could 
be developed. The great mass of natives, living 
most humbly, could afford to use oil only if a cheap 
lamp were available. Local tinsmiths made rude 
metal affairs which were almost worse than none, 
for the light was poor, and frequent explosions 
prejudiced the native minds against kerosene. The 
Standard quickly saw that successful trade devel- 
opment depended on first supplying the general 
need for an efficient lamp. Experiments soon indi- 
cated the most desirable type to meet native con- 
ditions, every care being taken to make the article 
as perfect as possible at a minimum cost. The 
Standard then added another to the long list of its 
activities and began the manufacture of both 
lamps and wicks on a large scale. As fast as they 
could be made, hundreds of thousands were shipped 
to the East where the Standard agents were di- 
rected to sell them at a price equal to about half 
the cost of actual manufacture. Still this proceed- 
ing was excellent business policy because every 
lamp sold at a small loss meant a demand for so 
many more gallons of kerosene to be sold at a good 
profit. This is the way the foreign trade has been 
extended in the battle to secure and retain mar- 
kets for American oil. 

For this country the Standard Oil Company has 
borne the brunt of this great commercial battle. 
Baku has been its leading opponent : America ver- 
sus Russia in a conflict still unsettled and now 

231 



THE STORY OF OIL 

more acute than ever before; a conflict in which 
success has not always crowned the efforts of the 
Standard, despite its enormous resources and al- 
most unlimited power. 

The first reversal suffered by the Americans was 
only to be expected; being driven out of the Rus- 




Crossing the desert with American case oil. 



sian market was inevitable from the very moment 
that modern progress began al Baku. The Rus- 
sians speedily accomplished this result by two 
means; first, improving the Baku refined product 
until it was a satisfactory substitute for the high- 
grade American oils, and second, imposing a heavy 
tariff on all petroleum imports. The Nobels were 
largely instrumental in raising the standard of re- 

232 



STRUGGLE FOR THE WORLD'S TRADE 

fined products, and, with them to push the trade, 
this securely protected home industry soon com- 
manded the entire Russian market. Imports of 
American products were reduced from thousands 
of barrels to a few hundred gallons or cases of spe- 
cial brands, and then to almost nothing. No com- 
pany, however powerful, could have contended suc- 
cessfully against a great and growing industry in 
its own country, protected by an absolute tariff 
barrier of sixteen cents a gallon. 

About the time the exclusion of American oil 
from Russia had become an accomplished fact, the 
opening of the Caucasus railroad and the advent of 
the Rothschild firm at Baku gave the signal for the 
Russians to reach out for foreign markets as well. 
American consuls at various Old World ports be- 
gan, about 1885, to report the appearance of Rus- 
sian oil in small quantities: fifty barrels here, a 
hundred barrels there, from England to Asia 
Minor. The Rothschild firm organized a distrib- 
uting business in Great Britain, long one of the 
chief strongholds of the American foreign trade. 
The Nobels soon followed their example, and the 
imports of Russian oil into Western Europe began 
to appear threatening. 

American exports of petroleum in 1890 had 
risen to nearly 20,000,000 barrels, at least one fifth 
of the total going to a half dozen leading European 
ports. Rusian exports at that time to these same 
ports equalled hardly a tenth of the American 
quantity. Following its usual custom, however, 

233 



THE STORY OF OIL 

the Standard promptly cut prices to kill this risii 
competition. Cutthroat methods had sullied to 
put the Standard in complete control of the indus- 
try at homo, but it was not so effective when ap- 
plied several thousand miles away to a rival in- 
dustry like thai of Baku. Despite every possible 
effort to prevent it, the exports of Russian oil con- 
tinned to increase from year to year. The elemenl 
of distance and geographical position was a factor 
which no system of organization could entirely 
overcome. 

At first in Europe, then in India and in the Ori- 
ent, Russian oil steadily invaded the marl 
long dominated by the Americans. Negotiations 
were begun to bring aboul a division of the world - 
market between the two rivals, the standard to 
supply seventy per cent, and Baku thirty per cent, 
qf the quantities taken by importing countries. 
Bui Russian prospects were too promising for any 
such agreement; if they could gel thirty per cent, 
of the trade peaceably they could gel more than 
that by fighting for it. Within fifteen years, the 
modest beginnings of fifty and hundred-barrel lota 
to one place were swelled to hundreds of thousands, 
and the total was mounting rapidly toward 10,- 
000,000 barrels a year. Only 500 barrels of Rus- 
sian oil found their way to Greal Britain in 1883 
as compared with over 1,300,000 barrels from 
America. Fifteen years later the Russian figure 
had risen to over 900,000 barrels, or fully one 
third as much as the American imports. 

234 



STRUGGLE FOR THE WORLD'S TRADE 

The Russian success in other localities was even 
more rapid and striking. A very few years were 
enough for the deluge of Baku oil to break Ameri- 
can control in the Levant and in the Mediterranean 
countries. Austria-Hungary, one of the leading 
buyers up to about 1887, practically ceased en- 



t 




u 


\ -""■•• x> 




w A jBL 



Selling American " bulk oil " on the plains of India. 

tirely to be a market after that date, partly as the 
result of Russian competition and partly through 
the tariff barrier adopted to protect the infant Ga- 
lician industry. Importations into Turkey and 
Greece also dropped suddenly to nearly nothing. 
The Standard at one time had enjoyed a virtual 
monopoly of the oil trade to the far East— to India, 
China, and Japan. Russia first entered that field 

235 



THE STORY OF OIL 

in 1887 and immediately proceeded to capture it 
bodily. So successfully and thoroughly was tins 
done, through the advantage of proximity and ease 
of shipment via Suez, thai the American trade hi 
steadily decreased. Russian imports, on the con- 
trary, have .just as steadily increased, until in rc- 
cenl years they have amounted to ten or fifteen 
times the quantity sent from this country. Rus- 
sian activity in foreign markets, it is true, has re- 
cently been temporarily checked by the unsettled 
condition of the industry al home. But, as soon 
it regains the ground losl during the uprisings of 
1905, the campaign for world markets is sure to 
be pushed more vigorously than ever, A larj 
measure of success has crowned the Russian efforts 
in European and Asiatic markets in the past; to 
whal extent they will drive out the American 
products in the near future is an absorbing qu< 
Hon at the present time for the operators in this 
country. Whatever the outcome it will he ;i battle 
of gianl interests for an enormous prize. 

Russia, however, did nol long remain the Stand- 
ard's only rival. When the Burmese industry 
began to grow, the standard feared the same fate 
\\)V its Indian trade that it had met previously in 
Russia. Already foreign oil had to pay a duty 
which mighl at any time ho raised to a prohibitive 
scale. The Indian markets were altogether too 
valuable to be lost, for the local industry could 
then supply only a small part of the enormous de- 
mand. There was, however, no way of telling how 

236 



STRUGGLE FOR THE WORLD'S TRADE 

much it might grow, so the Standard sought to get 
a hold on the Burmese supply by buying leases. 
But unexpected governmental opposition pre- 
vented the Standard from getting any sort of in- 
terest at all in the local industry. At the same 
time, a powerful British company was granted a 
practical monopoly of the field, thus adding a third 




Arecibo, Porto Rico. 



Burros loaded with case oil for the 
interior. 



highly favored rival for the Indian markets, where 
Russia was already making serious inroads on 
American profits. 

Galicia and Roumania became competitors to a 
small degree in the markets of Europe nearest to 
these fields. Japan for a time threatened to repeat 
the history of the Burmese field, leading to the un- 
profitable venture in the International Oil Com- 
pany, purchased by the Standard to operate fields 

237 



THE STORY OF OIL 

which never materialized. The Dutch Indies are 
the latest and one of the most dangerous rivals to 
appear. Through their location so near the im- 
portant Chinese markets, they have very rapidly 
secured a stronghold on the trade of thai country. 
This Dutch industry is all the more to be feared 

because the quality of the oil is hut little, if any, 

inferior to the best grades of American manuf; 
ture, and consequently it is able to compete on an 
absolutely equal footing. 

It must not be supposed, however, that the ap- 
pearance of strong competitors in the world's mar- 
kets has resulted in a curtailment of American I 
ports. Quite on the contrary, they have increased 

steadily since the very first, most rapidly, of eoui 
during the early years, but none the less surely all 

the time that this struggle has been going on. Be- 
ginning in 1861, the total had risen to over 2,- 
500,000 barrels in 1870; to five times that quantity 
in 1880; doubled again by 1900; and now equal to 

some ;>(),()()().(><>() ban-els annually, worth upward 
of $85,000,000. Such an increase, in the face of 
steadily growing supplies from other districts, h;is 
been made possible by the enormously greater de- 
mand in nil parts of the world and the untiring 
efforts of the Standard Oil interests. Strong 
competition has merely changed the direction and 
character of American trade. 

Kerosene, the greatest article of trade from 
among the petroleum products is really an Ameri- 
can specialty, both by virtue of practice and quali- 

238 



STRUGGLE FOR THE WORLD'S TRADE 

ties of crude oil. America, therefore, has had the 
advantage coming from a superior grade of manu- 
factured product, though this advantage has been 
lessened recently by technical advances in other 
countries. American lubricating oils surpass all 




Case oil by caravan, Arabia. 



that the rest of the world can offer, and in actual 
value per gallon they stand second to none of the 
other products. The paraffin oils of this country 
are without a peer elsewhere, thus making the wax 
a decidedly valuable article of trade, while naph- 
thas are secured in larger amounts from American 
crude than from any other yet known. Where dis- 

239 



- THE STORY OF OIL 

criminative duties place restrictions on trade in 
refined products, as in France, Spain, and Mexico, 
the simple practice of shipping crude oil has saved 
the day for American oil. Added to these natural 
advantages, the unfailing insistence on the part of 
the Standard officials for reliable oils of high qual- 
ity has been well known abroad and has been an 
ever constant help in keeping valuable markets. 

It is impossible more than to hint at the obstacles 
which the Standard lias encountered in its trade 
round the world: the long struggles to open new 
markets; in educating halt* civilized natives to the 
advantages of artificial light; the time and money 
spent in experiments; and the slow, often discour- 
agingly slow, successes. Everywhere the Stand- 
ard has fought its fighl on the ground, carrying 
the Struggle Straight into the contested territory, 
usually with a local company under its own domi- 
nation. Such companies as the Anglo- American 
Oil Company, in England; the American Petro- 
leum Company, in Holland; the Societate Romans 
Americana, in Roumania, are found in almost 
every country where the Standard does a large 
husiness. Like their fellows in the United Sta1 
they are manufacturing or selling companies, for 
the Standard abroad has even more rigidly adhered 
to its policy of not engaging in actual production. 
This world-inclusive organization has been one 
of the main reasons for Standard successes, in just 
the same way as the union of interests in this 
country brought it immense power to fight compe- 

240 



STRUGGLE FOR THE WORLD'S TRADE 

tition. None of the foreign oil regions possessed 
this great advantage of a centralized industry. 
Several Russian operators were strong individually 
but their strength in outside competition would 
have been increased tenfold had they worked as 
a unit instead of separately. At the present time, 
however, this process of concentration and econ- 
omy of large operation is going on everywhere at 
a rate which promises trouble ahead for the Stand- 
ard. In every oil-producing country the example 
of the Standard is being copied studiously, profit- 
ing from its successes, avoiding its mistakes. The 
Standard long ago acquired a high degree of effi- 
ciency and has labored untiringly to strengthen and 
perfect its position. Through this efficiency its early 
victories came so much the easier. Now, however, 
its rivals are acquiring the same perfection of sys- 
tem and organization, the same concentration of 
capital, and often, in addition, they have secured 
the active support instead of the opposition of their 
governments. 

In the East there is the British Company hold- 
ing a monopoly of the Burmese fields. A powerful 
combination of the Shell Transport and Trading 
Company, with the Royal Dutch Company and the 
Rothschilds' interests, has been completed to con- 
trol not only the industry of the Dutch Indies but 
also the distribution of Russian products in the 
Orient. A single company patterned after the 
Standard, with almost unlimited backing, now con- 
trols about ninety per cent, of the Galician in- 
17 241 



THE STORY OF OIL 

dustry. Legal steps have been taken to oust the 
Standard company from Roumania, one of the few 
localities where it has acquired foreign holdings, 



&&) ^ 




Into the Sahara desert with American kerosene 

while a rival organization is ready to assume the 
control. Baku, at last, also has its scattered in- 
terests united by a powerful syndicate of German 
capitalists. The British interests, forming an im- 
portant second group by themselves, have been en- 

242 



STRUGGLE FOR THE WORLD'S TRADE 

listed with the German concern, to work toward 
a common end. This means still greater rivalry on 
the part of Russian oil especially in the markets of 
Western Europe. 

A new era is unquestionably dawning upon the 
oil business. Every advantage, improvement, or 
economy that skill and capital can secure will be 
had by these rival, foreign oil "trusts." Their 
efforts to perfect methods of refining, handling, 
and marketing, and to extend the sale of their 
products will be no less vigorous than have been 
those of the Standard. A mighty struggle is inev- 
itable. The struggle in the past has been one of un- 
equal forces, the Standard like a perfectly trained 
army arrayed against disorganized stragglers. In 
the future it will be a struggle of well-matched 
forces, each with modern equipment, each with 
enormous resources behind it. The Standard has 
the confidence born of many victories; it is well 
prepared to meet worthy foes. AYhat the outcome 
will be, no one can foretell. Should the Standard 
suffer defeat, the blow to operators in this coun- 
try would emphasize, as nothing else could, the 
far-reaching importance of the present foreign 
trade in petroleum products even to the smallest 
of American producers. Yet from the standpoint 
of maintaining our supplies for future genera- 
tions, nothing could be more desirable than to have 
all the foreign markets won away from this 
country. 



CHAPTER XIII 

THE OIL FIELDS OF TO-MORROW 

It has recently become a national habit to ques- 
tion the future of important natural resources. 
The probable duration of the forests, of the coal 
supply, of iron ore and the like have been the sub- 
jeel of much speculation. For some unaccountable 
reason, however, the future of petroleum has been 
ignored, as though it matters little one way or 
another. Yet, with all truthfulness, petroleum can 
he said to stand second to do other mineral product. 
The continuation of the supply of petroleum is 

fully as important as the continuation of the coal 
supply. The loss of a good, cheap means of se- 
curing artificial light would set the world hack a 
hundred years. Millions on millions of people, 
whether they know it or not. are vitally concerned 
in the question of the oil fields of to-morrow. The 
actual comfort and happiness of these millions 
hinges on the answer to the question, "How long 
will the supply last . } Is it inexhaustible or is the 
end not far distant?" 

Fifty years ago the animal output of petroleum 
for the entire world was certainly much less than 

244 



THE OIL FIELDS OF TO-MORROW 

1,000,000 barrels. Twenty-five years ago it was 
not far from 30,000,000 barrels. Ten years ago it 
was approximately 125,000,000 barrels; in 1907 
it was over 260,000,000 barrels and as yet shows 
no signs of having reached its limit. Petroleum 
products have been put to such a variety of uses 
that there is apparently no limit to possible con- 
sumption. With the greatly increased use for fuel, 
the continued success of the gasoline engine, the 
greater and greater extension of the sale of kero- 
sene to the rural population of the world, to say 
nothing of the steadily growing favor of other 
products, all sure to be as marked in the future as 
in the past, there is little reason to look for any 
great change in the rate of consumption ; certainly 
no decrease is likely. 

A continuation of the past rate of increase dur- 
ing the next fifty years would mean a petroleum 
industry as much greater than the present, as the 
enormous operations of to-day are greater than 
those of Kier's time. If the world output should 
continue to double each decade in the future, as it 
has in the past, fifty years hence would see the 
annual production approaching 10,000,000,000 bar- 
rels, or more than four times the entire yield from 
the United States in the half century since the 
industry began. It w T ould require nearly 200,000 
w^ells, each giving 100 barrels a day for every day 
in the year, or an average daily production some 
twenty-five times greater than that of the wells in 
this country at the present time. No imagination 

245 



THE STORY OF OIL 

can picture the apparatus and organization which 
would be required to produce and handle such an 
incredible quantity of oil. 

There are few reasons, however, for believing 
that such an enormous growth of production in the 
future can be possible. The origin of petroleum 
and the nature of its occurrence, the character of 
the industry, the whole history of the oil regions 
and of individual wells, all point clearly to one 
inevitable conclusion. This conclusion, in brie!', is 
that the supply of petroleum is strictly limited; 
that once this supply is -one, no more is to be 
had, and that the time is not far distant when 
the limit of maximum production will have been 
reached. 

Many people still believe that the process by 
which petroleum is formed is a continuous one, or. 
in other words, that the underground reservoir is 
constantly being replenished as oil is withdrawn 
from the well. According to this idea, exhaustion 
of the supply is a thing of the dim and hazy future. 
The accepted theory of origin and the known con- 
ditions of occurrence, however, very thoroughly 
shatter this notion. Petroleum is admittedly the 
product of decomposing organic matter imprisoned 
in the strata at the time of their formation. It 
follows inevitably, therefore, that the amount of 
petroleum which can be formed is absolutely lim- 
ited by the quantity of fossil remains to undergo 
decomposition. Hence, when the process of decom- 
position is once completed, it is through for all 

246 






THE OIL FIELDS OF TO-MORROW 

time as far as that particular stratum of rock is 
concerned. 

The strata which are oil bearing have existed in 
their present condition for untold thousands, prob- 
ably millions, of years. Hence the process of de- 
composition must have been completed ages ago, 
or, if not yet completed, it must be so infinitely 
slow that the quantity accumulated in a thousand, 
or ten thousand, years would be entirely insig- 
nificant. AVhichever way the question is consid- 
ered, indisputable evidence leads to the one conclu- 
sion that the entire supply procurable is now 
already stored underground waiting for the drill. 

This does not mean at all that man can win from 
nature her-whole bountiful supply of the precious 
liquid. It means merely that certain great accumu- 
lations have been gathered under favorable condi- 
tions, and these man may have. Other far greater 
quantities exist in the rocks of the earth, but in 
such a way as to be entirely inaccessible and un- 
available through any method now known. 

A single formation, to take a specific example, 
underlies many hundred square miles of the dis- 
trict south of Lake Erie. The formation is esti- 
mated conservatively to be 500 feet thick, and to 
have a very uniform content of petroleum amount- 
ing to about a tenth of one per cent, of its bulk. 
This quantity is, of course, far below the limit of 
possible productivity— Baku sands frequently con- 
taining as high as twenty per cent, of their bulk — 
but, small as it is, it means an actual quantity of 

247 



THE STORY OF OIL 

2,500,000 barrels of petroleum for every square 
mile covered by the formation. To duplicate the 

entire production of the United Slates up to the 
present time would require the whole petroleum 
content from only 720 square miles of that one 
rock layer. Yet, disseminated as it is throughout 
the rock, it is entirely unavailable. It is dissem- 
inated not because it is of more recent formation 
than the available supplies, but because the condi- 
tions underground have not favored its concentra- 
tion in a rich pool. Its actual age, in fact, is very 
much greater than that of some of the most pro- 
ductive supplies now developed. There is, there- 
fore, no cause to suppose that old pools may be 
replenished, or new pools be forming, from such 

sources. Every evidence says plainly: Here is 

much oil accumulated by chance; take it as fasl 

you wish, but remember that when it is gone the 
reservoir can never be refilled. 

The history of whole districts and of individual 
Wells tells the same story. The life of pools and 

wells, of course, varies greatly in differenl cas< 

Thus, the Pithole district lasted only a few years 
and then failed entirely, while the Franklin area 
near by is still producing high-grade oil after forty 
years of activity. One well may fail after a few 
months or a year; others have been known to yield 
continuously for a quarter of a century. With 
very few exceptions, however, the original produc- 
tion of a well is greater than at any subsequent 
time in its life, and the downward career begins 

248 



THE OIL FIELDS OF TO-MORROW 

almost from the very moment oil is struck. It may 
take years for the end to come, but its coming is as 
sure as the light of day. 

The average duration of profitable production 
from a well is about five years, though a multitude 
of circumstances cause wide variations from the 
average. The important point, however, is that 
profitable production does cease sooner or later, and 
that as the older wells give out, new wells must be 
drilled to keep up the supply. This alternative, 
in turn, ceases to be effective, and the whole re- 
gion gradually falls into decay. Every locality 
must eventually reach the limit beyond which the 
production begins to decline. Such has been the 
case in all the older pools; such must be the case 
w T ith every pool discovered until the end of time. 

The Texas field affords the most startling con- 
firmation of these facts. Spindle Top began in 
1901 with a giant gusher and a burst of glory un- 
rivaled in this country before that date. Wells 
starting out with 75,000 to 100,000 barrels a day 
were encountered and gave the pool a production 
of over 34,000,000 barrels in the first four years 
of its life. But in 1905 the daily production had 
fallen to 4,000 barrels a day. All the Texas 
pools have had the same meteoric career, and, 
unless new r ones are discovered soon, that state 
will cease to be an important factor in the in- 
dustry. Even the highly productive Baku dis- 
trict bears in effect the same sort of testimony. 
Over two hundred wells were opened there in 

249 



THE STORY OF OIL 

1888; less than two-score of them were producing 
at all fifteen years later. Out of 400 completed 
in 1900, more than a fourth had failed inside of 
three years— wells which may have taken several 
years for completion and cost as high as $20. (MM) 
each when done. The very life of the petroleum 
industry depends on unceasing activity in drill- 
ing. As far as production is concerned, it is an 
industry here to-day and gone to-morrow. 

The great Appalachian district, so Long the 

leader in this country, is now rapidly approaching 

its end, and its demise may presage the actual 

decline of the whole American industry. In 1891 

Pennsylvania reached the height of its long career 
with a yield of over 33,000,000 barrels, bul since 

then the downward course has been steady. To- 
day the entire Appalachian field from New York 
to Tennessee yields less than two thirds of thai 
amount. Other fields in this country are going 

the same way. Ohio, which reached almost 24,000,- 

000 barrels in 1896, had fallen to hardly more than 

12,000,000 in 1907. Texas dropped with unparal- 
leled rapidity from 28,000,000 to less than half 
that quantity in two years. They tell the st«»ry of 
oil with absolute truth. In each of these older 
fields thousands of new wells have been drilled 
annually during the whole progress of the de- 
cline, hundreds of thousands of wells in all, with- 
out sufficing to maintain the former supply. 
Every year has seen an increasing percentage of 
"dry" holes, until now many districts are so far 

250 






THE OIL FIELDS OF TO-MORROW 

depleted that one out of every three wells sunk 
fails to yield oil. 

This decline in the Appalachian field has come 
just when the demand for the highest grade oils 
is greater than ever, and growing annually. The 
rapidly increasing use of gasoline and the other 
lighter products of distillation cannot well be met 
from the supplies of heavy asphalt oils from the 
Gulf and the California fields. Already many 
w T ells reported as productive have really reached a 
condition where the production, amounting per- 
haps to less than a barrel a day, can be done at a 
profit only through the strictest economy or be- 
cause the oil is of a special quality. Unless some 
new supplies of high-grade oil are discovered 
soon, the price of the lighter refined oils must 
advance, and the heavy drain on the Appalachian 
region will result in speedy exhaustion. 

The ultimate fate of every petroleum-producing 
region is plainly written in the character of the 
deposit. Every w T ell, every locality, shows essen- 
tially identical stages of development. The well 
begins as a gusher, perhaps, gradually ceases to 
flow, has a pump installed, and finally ceases to 
yield at all, as salt water appears in the pipe. 
Every step is steadily downward. The locality 
begins with a boom, yielding enormous quantities 
for a time, settles down to steady production ; then 
wells begin to fail, others can be operated prof- 
itably only by adopting the most economical meth- 
ods of pumping, perhaps a hundred or more in 

251 



THE STORY OF OIL 

one multiple system; new wells fail to find oil; 
and the end is close at hand. 

Many wells in the Appalachian region at the 
present time can be operated profitably only be- 
cause a local supply of natural gas permits the 
use of the cheapest kind of power in the form of 
gas engines; in whole sections, the industry is kepi 
alive solely by this means. The failure of the g 
supply would mean not only the immediate aban- 
donment of thousands of wells now yielding a few 
gallons «i day but also a greatly increased cosl of 
securing the oil from other wells. Fields ! 
abundantly supplied with stores of natural g; 
as appeal's to be the case in many of the newer 
localities, must inevitably reach the limit of prof- 
itable operation more quickly. As it is with indi- 
vidual wells and separate localities, SO it must he 
sooner or later with whole countries. 

The important point in the future of petroleum, 
therefore, is easily foreseen. As long as new local- 
ities can be discovered and developed rapidly 
enough to counterbalance the decline of old fields, 

the industry will continue to flourish. It is not 
impossible that even some of the older localil 
may witness a revival of operations as the future 
brings improved and cheaper methods of deep 
drilling. In certain parts of the Appalachian dis- 
trict, for example, strata known to be oil bearing 
elsewhere can be reached only with wells 6 9 000 
feet deep, and such deep drilling has not yet been 
undertaken. If valuable accumulations of petro- 

252 






THE OIL FIELDS OF TO-MORROW 

leum do lie thus deeply buried, important devel- 
opments from that source may come long after the 
upper strata have been completely exhausted. 
This possibility, however, is comparatively remote, 
partly because the existence of deposits at such 
great depths is still purely hypothetical, and 
partly because the cost of production from very 
deep wells would be greatly increased over the 
present figures. 

The principal hope for the future rests on the 
results obtained in the places where surface indi- 
cations of petroleum are known to exist. The char- 
acter and extent of these deposits can be revealed 
only through future attempts at commercial de- 
velopment, but there are many reasons justifying 
the belief that deposits, as rich as any now worked, 
are still untouched. The future will certainly see 
profitable oil industries carried on in many regions 
where a beginning is yet to be made, perhaps in 
localities so far not even associated with the name 
of petroleum. These unproved deposits, if they 
fulfill all expectations, will at first much more than 
counteract the decline in older fields. Thus, the 
prospects of an increased world's production, for 
a time at least, are exceedingly good. 

Russia undoubtedly possesses far greater petro- 
leum deposits than any other country, and is ap- 
parently destined to lead the world. There is, of 
course, no telling to what extent the industry may 
develop in the Dutch East Ifidies or in some of 
the little known portions of the different conti- 

253 



THE STORY OF OIL 

nents, but, in the light of present knowledge, Rus- 
sia stands unrivalled. Enormous tracts of oil- 
bearing territory are known to exist in the vast 
area of the Russian Empire, in fields which the 
government will not yet open to exploitation. 
The Baku oil field apparently extends beneath 
the Caspian Sea because the eastern shore, oppo- 
site Baku, is marked by the rich deposits of the 
trans-Caspian provinces. The opening of the 
trans-Caspian Railway stimulated exploration of 

the resources of the district traversed, and all the 
signs indicate valuable fields of petroleum nearly 

parallel to the railroad. No developments of any 
importance have been undertaken here, however, 

partly because of its isolation from markets, but 

mainly because the government fears that over- 
production would injure the whole industry, and 
consequently refuses to allow exploitation. The 
government has not forgotten the enormous waste 
during the early days of some of the Baku pools. 
when millions of barrels of oil were burned merely 
to be rid of it. 

Petroleum deposits are known to exist over a 
great extent of territory in eastern Siberia, where 
development must wait for transportation facil- 
ities to carry machinery, supplies, and shipments 
of oil. The existence of large quantities of petro- 
leum has been proved in the northern part of the 
island of Saghalien, now held by Russia. Test 
wells there are said to have given promise of fully 
equaling some of the greatest of the Baku spout- 

254 






THE OIL FIELDS OF TO-MORROW 

ers. Though no extensive development has yet 
been undertaken, this Saghalien field is admirably 
situated to dominate much of the Oriental trade. 
These untouched Russian deposits stand as vast re- 
serve stores for future use, when the enormous 
resources of the Caspian shore shall have been ex- 
hausted, or are no longer adequate to meet the 
increased demands. It is not at all unlikely that 
these localities in far-off trans-Caspia and Siberia 
will eventually become the mainstay of the world's 
petroleum industry. 

Other Asiatic deposits are also known in addi- 
tion to those in Russian territory and those already 
worked in India, Burma, and Japan. Explora- 
tions in the desert, on the frontier between Persia 
and Turkey in Asia, have revealed the existence 
of valuable petroleum fields, and already a large 
English company has secured a sixty-year conces- 
sion to carry on their exploitation. This same oil 
territory, moreover, apparently extends to the 
northwest across the border into Turkey, for fields 
of large extent have been discovered in the district 
near Bagdad. A concession for working these de- 
posits has been secured by the company construct- 
ing the Bagdad railroad. Not enough develop- 
ment has yet been done to indicate the value of 
these deposits, but, even if they do not prove to 
be as rich as their neighbors at Baku, they will 
be of inestimable value in that country, now so 
destitute of satisfactory fuel. Any surplus above 
home consumption will find profitable markets 

255 



THE STORY OF OIL 

close at hand, for the great population of India 
probably must always look to the outside world to 
secure much of its supply. 

The work of development lias already been 
begun in Beluchistan, the Punjab, and Assam, the 
last-named place said to have promise of a very 
good future. The Philippines, Formosa, and New 
Zealand show unmistakable surface signs of petro- 
leum deposits, though all developments so far un- 
dertaken have been failures. Lack of capital, how- 
ever, has had much to do with this poor sue 
Whatever other oil-bearing localities may be found 
in the vast stretches of Asiatic territory, there is 

little doubt that the whole world might now easily 

draw its entire supply from the rich fields already 
known to exist there. It seems inevitable that all 
the greal markets of the Orient must before long 

be lost to the western world through the develop- 
ment of Asiatic resources. 

The United States has no such reserve supplies 

of petroleum as are found in the territory of its 

rival— Russia. Sonic of the less accessible districts 

of the West, however, hold out good prospects, 

especially in the case of the various fields in Wyo- 
ming. The limit of production in the greal Kan- 
sas field is probably not yet reached. Alaska ap- 
pears to contain several oil-bearing districts which 
may become second Klondikes. New developments 
may come at any time in Texas or in some of the 
little-known deposits of Montana and New Mexico. 
Unless the unexpected happens, however, it is more 

256 



THE OIL FIELDS OF TO-MORROW 

than likely that this country has already risen 
nearly to the height of its career. A continuation 
of the recent decline in Texas and the constantly 
heavier drains on the older fields, hastening an 
already rapidly approaching end, will mean the 
necessity of new developments far beyond any- 
thing in sight now, to carry the production for any 
length of time much above its present high level. 

Various other countries of the American conti- 
nents are likely to appear in the list of important 
oil fields of the future. What is regarded as per- 
haps one of the greatest fields in the world lies 
in the west and northwest of Canada. Twenty 
years ago a royal commission recommended set- 
ting aside as a great petroleum reserve some 
40,000 square miles in the vicinity about the Atha- 
basca River and in the present province of Al- 
berta. Recent settlement in this region has been 
accompanied by successful oil operations, the ex- 
cessive freight rates from the Eastern markets 
having created highly favorable conditions for 
undertaking ventures of a very modest nature. 
Improved transportation facilities will make these 
deposits an important factor in the future indus- 
try, if the present investigation in the interests 
of the British navy gives encouraging results. 

Mexico was long regarded as a country devoid 
of extensive petroleum deposits; in fact, large 
cash inducements were offered by the government 
to anyone who would discover an important field. 
Recently, however, the country has sprung into 
18 257 



THE STORY OF OIL 

prominence through the greatest and most spec- 
tacular oil fire ever known, burning for two 
months, with successive explosions, converting the 
well into a veritable volcano, and flames reported 
to be shooting more than a thousand feet into the 
air. Defying all efforts to cheek its fury, it is esti- 
mated that not less than 5,000,000 barrels of oil 
were burned in the. first six weeks of its strange 
career. Such a quantity easily rivals the produc- 
tion of the greatest wells of the Caucasus. It must 
be regarded as indicating the presence of very rich 
deposits in the Tampico district where the well 

was located. Numerous other Mexican localities 

have given satisfactory results in recent test wells, 
but none of them have approached this prodigious 
outpouring in the burning well of San Qeronimo. 
Nearly all the important South American coun- 
tries contain known petroleum-bearing areas, 
though Peru alone can boast at present an actual 
industry of any prominence. Brazil, Argentine, 
Chile, Bolivia, Colombia, and Venezuela, all fur- 
nish surface indications of extensive desposits, 
but, with few exceptions, systematic development 
is yet to begin. What such operations might yield 
is purely a matter of conjecture. Companies have 
already been formed in Chile and the Argentine 
to carry on operations, and it is not unlikely that 
their ventures, if successful, will lead to an impor- 
tant petroleum industry in South America. The 
lack of capital appears to be the principal obstacle 
to overcome. 

258 






THE OIL FIELDS OF TO-MORROW 

Africa is entirely too little known to allow any 
satisfactory estimation of its petroleum possibil- 
ities. Deposits are, however, already being devel- 
oped in Algeria and Egypt, where bright prospects 
are said to exist. South Africa, too, has lately 
been added to the list, most pronounced indica- 
tions of petroleum having been found in the 
Walkerstroom district. An abundant local supply 
of good fuel oil would be of incalculable assist- 
ance in the industrial development of this region. 

Nature's vast and mysterious underground store- 
house doubtless contains many other accumula- 
tions of petroleum which are now unknown— per- 
haps never will be known ; accumulations which 
may be much greater than any so far tapped by 
man. Any one of a hundred known indications 
may lead the way to another Baku, for there is no 
logical reason why other equally productive areas 
should not exist. But, without unknown localities 
to be discovered in the future, without productive 
localities of the Baku type, there are apparently 
enough proven fields in existence to insure the 
world 's supply of petroleum for some time to come. 
When these fields have repeated the history of 
Pennsylvania or Ohio, the end of the industry 
will be at hand. Everything, of course, depends 
on the rate at which consumption increases during 
the next fifty years, and the results obtained by 
future systematic developments in the fields scat- 
tered all over the different continents. Should 
every new field prove to be a second Spindle Top, 

259 



THE STORY OF OIL 

enormous overproduction would be quickly fol- 
lowed by practical exhaustion. A comparatively 
few developments like the great Baku or even the 
Appalachian field, on the contrary, will suffice to 
keep the industry going for many generations. 
Where the world would look for light, if the sup- 
ply should fail, cannot be answered easily. 

The forests can be saved or restored by human 
efforts. Water power is supplementing or re- 
placing power from burning coal to an increasing 
extent vxrvy year. Even iron is so universal in 
nature thai new metallurgical processes would 

make available unlimited quantities from minerals 
now regarded as worthless. Not so with petroleum. 
Human efforts can never replace the exhausted 
stores, neither is there any practical way of sup- 
plementing its use by other substances, or of in- 
creasing the available supply. Petroleum is doomed 
to disappear. Almost as soon as a new field is 
opened the search for its successor must begin. 
The supplies of to-morrow cannot be furnished 
from the 1 fields of to-day. Not the present gener- 
ation nor the one next to come is likely to see tin 4 
supply fail, but both are sure to see changes such 
as the industry has never shown before. With a 
continuation of the present conditions no power 
on earth can avert the speedy exhaustion of the 
fields in this country. Standard Oil will he a 
thing of the past, and America will have to 
her oil in the countries where she long held 
undisputed sway in the oil trade, and where 

260 



THE OIL FIELDS OF TO-MORROW 

she has given so largely of her own abundant 
supplies. 

The oil fields of to-morrow lie in the remote 
parts of the earth, where man has not yet pene- 
trated in great numbers. They lie in the desolate 
wastes of Russian Turkestan and Siberia, in the 
unclaimed empire beyond the Rocky Mountains 
and in the Canadian Northwest, in the vast plains 
of our sister continent to the south, and in the 
heart of Africa. The enormous industry of to-day 
is but a little child beside the giant which must 
develop these fields of to-morrow, and spread 
their products to every fireside in the civilized 
world. Man must have light and the ends of the 
earth must yield up their w r hole store of hidden 
treasures to supply him. 



INDEX 



Accumulation, conditions 
necessary for, 15. 

Africa, oil fields in, 259. 

Agitators, 121. 

Alaska, oil fields in, 256. 

Algeria, petroleum in, 259. 

American medicinal oil, 39. 

Anglo-American Oil Com- 
pany, 240. 

Appalachian field, area of, 11. 
economical operations in, 

252. 
supplies of, deep seated, 

252. 
yield of, decline of, 250. 

Appolonius, story of Cau- 
casus by, 23. 

Archbold, John D., 200. 

Argentine, petroleum in, 2,58. 

Artesian well, importance of, 
65. 

Asphalt, 4. 

Assyria, petroleum in, 20. 

Astatki, 119, 207. 

Astrakhan, Baku oil at, 209. 

Babylon, bitumen used in, 21. 
Bakersfield, CaL, discoveries 
near, 166. 



Baku, age of industry at, 205. 
area of field at, 204. 
combination of interests at, 

242. 
decline in supply of, 249- 

250. 
early conditions at, 206. 
fireworshippers at, 29. 
gushers of, 76, 214. 
Hanway, account of, by, 

31-32. 
history of, early, 28-32. 
industry, effect of, on 

town, 216-217. 
sudden rise of, 213-215. 
Marco Polo, account of, by, 

30. 
monopoly, Russian. 205. 
opening of, 205. 
position of, 213. 
production, methods of, 

207. 
riots at, 215. 
trade, 227, 233-234. 

expansion of. 234-236. 
transportation from, 208- 

209. 

wells at, 204. 

Barges, bulk, 99. 



263 



INDEX 



Batoum, development of port 

of, 210-211. 
Beaumont, Tex., gushers at, 
168. 
oil field at, 168-169. 
production of field, 169. 
Benzine, distillation of, 120. 

uses of, 140. 
Betton's British oil, 27. 
Bible, references to bitumens 

in, 22-2:5. 
Bissell, ( reorge II.. 13. 
Bitumen family, members of, 

4. 
Bolivia, petroleum in, 258. 
Brazil, petroleum in, 258 

Buoy, petroleum. 138. 

Burkesville, Ky.. medicinal 

oil from. 39. 
Burners, duplex, 135. 

jet, in furnace.-, 1 13. 

kerosene, 135. 
Rochester, 135. 

Burma, petroleum industry 
in. 218. 
early. 28. 

growth of, 236-237. 
wells in, dug, 63 64. 

California, developments in, 
n.i -167. 
production of, 166. 
Canada, oil fields of, 257, 

industry in, 219. 
Canadian boring system, 71- 

72. 
Carbon oil, 42. 



Cars, tank, early, 87. 
loading of, 103. 
modern, 102. 
Case oil. trade in. 104-105. 
Caspian Sea. deposits about, 

205-206, 254. 
Caucasus Railroad, effect 

of. on Baku industry, 

210. 
Cavities, theory of occurrence 

in. 9. 
Chaldea, use of bitumens in. 

20. 

Chesebrough Mfg. Co.. L53. 

Chile, petroleum in. 258. 
Cleveland, Ohio, early re- 
fining at, is" 181. 
( foal, relation of petroleum to, 

3 1. 12. 
Coalinga, Cal., field :it. loo. 
Coal oil. origin of nam< 
u Coal ( >il Johnny," story of. 

201 202. 
Colombia, petroleum in 
Colorado, oil industry in, 

L64. 
Columbia ( londuit Company, 

is;,. 

Condensers, ill. 

( lorsicana, boom at , 167. 

Cosmolene, 154. 

Cracking process, 116 117. 

Cuba, X. Y., oil springs at, 

Cuts, in refining, 1 10. 

Cylinder stock process. 117- 
118. 



2i'A 



INDEX 



Derrick, erection of, 67. 

use of, 71. 
Distillation, continuous, 118- 
119. 
cylinder stock process of, 

117. 
intermittent, 114-117. 
running to tar in, 115-116. 
stills used in, 111, 117. 
Divining rods, use of, 66. 
Dodd, S. C. T., 200. 
Drake, Colonel E. L., 45-43, 

60-61. 
Drilling, American system of, 
69. 
Canadian system of, 71-72. 
operation of, 68-74. 
tools in, 69, 71. 
Droojba gusher, account of, 

223. 
Dutch East Indies, petroleum 
industry of, 219-220. 

Egypt, petroleum in, 259. 
Egyptians, use of petroleum 

by, 21-22. 
Emery, Lewis, 188. 
Empire Transportation Co., 

185. 
Eveleth, Jonathan, 43. 

Fire test, 128. 
Flagler, Henry M., 180. 
Flash test, 128-129. 
Foreign trade. See Trade. 
Freshets, pond, use of, 83-84. 



Fuel, petroleum as, advan- 
tages of, 139-143. 
in locomotives, 144. 
on naval vessels, 146. 
on steamboats, 144-145. 

Gabian oil, 26. 

Galicia, petroleum industry 

of, 220-221. 
Gas, natural, 4, 5. 

for pumping, 252. 
with petroleum, 19. 

oil, for illuminating, 139. 
Gas engine, Otto, 148. 
Gasoline, distillation of, 121. 

purification of, 120. 

testing of, 127-128. 

uses of, 140. 
Gasoline engine, invention of, 
148. 

marine, 150-151. 

principle of, 147. 

size of, 149. 

uses of, 150. 
Gesner, Abraham, 41. 
Greek literature, accounts of 

petroleum in, 23. 
Gusher, Baku, 75-76. 

Beaumont, 168. 

cause of, 19. 

first drilled, 52. 

in Mexico, 258. 

striking of, 75. 

yield of, 76. 

Hanway, John, account of 
Baku by, 31-32. 
265 



INDEX 



Harkness, Stephen, 180. 

Herodotus, bitumens men- 
tioned by, 21, 24. 

Hildreth, Dr., prophecies 
by, 38-39. 

Illinois, recent developments 

in, 171-172. 
India, oil fields in, 256. 

Indiana, industry in, 170. 
Indians, use of petroleum by, 
34-3-k 

Japan, early discoveries in. 

'J 7. 
modern industry of, 221. 

Standard ( )il ( ompany in, 

237. 

Jars, importance of, 

Kansas, <>il fields in. 171) 171. 
phenomenal production of, 
171. 
Kerosene, accidents from, 
early, 13 1-135. 
advantages o\\ 136. 

burners for, 135. 
cost of lighting with, 136- 
137* 

cracking for, 115-116. 
dangers from, 133-1:') L 
distillation of, 11,5-117. 
foreign trade in, 238. 
grades of, 128. 
invention of, 41, 132. 
purification of, 121. 



Kerosene, recipes for home 
manufacture of, 131. 
testing of, 127-128. 

Kicking down, well drilling 

by, 68. 
Kier, Samuel, burning oil of, 
41. 
carbon oil. made by, 42. 

medicinal oil of, 40. 
Lamps, burners for. 135. 

improved appliances for, 

135. 
incandescent mantle for, 
137. 

band values, boom. ."><). 

change in, 1 72. 

Lima, Ohio, oil field near, 

162. 

Location of wells, methods 

used in. <><> 68. 
Locomotives, oil burning, 

l 11. 

1...- Angeles, ( 'ah. oil wells in, 

166. 
Louisiana, oil developments 

in. 171. 
Lubricating oil. petroleum, 
advantages of, 151. 
distillation of. 122. 

foreign trade in. 239. 
grades of. 123. 

purification of, 123. 
superiority of American, 

152. * 
testing of. 120-130. 
uses of, l«32-lo3. 



266 



INDEX 



Mantle, incandescent, for ker- 
osene, 137. 
Marco Polo, account of Baku 

by, 30. 
Marine engines, gasoline, 150- 

151. 
Medicinal properties of oil, 
early beliefs in, 26, 27, 
32, 34, 36, 39-40. 
modern uses of, 154 
Mexico, oil fields of, 257-258. 
Mineral oil, 3. 
pitch, 5. 
tar, 4. 
Monopoly, antiquity of, in 
oil industry, 175 
at Baku, 175. 
in Burma, 175-176. 
modern, 176-177. 

Naphtha, distillation of, 120- 
121. 
purification of, 119. 
testing of, 126. 
uses of, 155. 
Nobcls, operations by, at 
Baku, 207-209. 

Occurrence of oil, anticlinal, 
15-16. 
early theories of, 9. 
in cavities, 9. 

independence of surface, 10. 
in pools, 10-11. 
unavailable supplies, 247- 

248. 
underpressure, 16. 



O'Day, Daniel, 200. 
Ohio, character of oil from, 
194. 
decline in, 250. 
development in, 161-162. 
Oil City, growth of, 49-50. 
Oil Creek, 45. 
boom on, 49-50. 
production along, 53. 
springs near, 43. 
transportation from, 49, 
82-84. 
Oil fields, discovery of, in re- 
lation to future supply, 
252. 
exhaustion of, 249-251. 
location of, 16-17. 
Oil sands, 15, 17. 
Ontario, industry in, 219. 
Origin of petroleum, impor- 
tance of, in future sup- 
ply, 246. 
theories of, 11-15. 
Ozocerite, 5. 



Paraffin, distillation of, 124. 

foreign trade in, 239. 

uses of, 154. 
Parsee temples at Baku, 29. 
Pennsylvania, decline of oil 
production in, 250. 

early boom in, 47-51. 

oil pits in, 34. 
Persia, oil fields in, 255. 
Petrolatum, 154. 
Petrolene, 154. 

267 



INDEX 



Petroleum, accumulation of, 
conditions necessary 
for, 15-16. 
character of, 5-6. 
composition of, 7. 
consumption of, 45. 
density of, 7-8. 
derivation of name of, 3. 
distillation of, 107-110. 
impurities in, 7. 
occurrence of, 8 10. 
origin of, 111 1. 
products of, 132-156. 
supplies of, exhaustion of, 
260. 
future. 244, 261. 
unavailable, 2 17. 
surface indications of, 8. 
uses of, crude, 139 1 13. 
Petroleum industry, growth 
of American, 158 160. 
Petroleum jelly, 15 1. 
Pipe, drive, invention of, 15. 

for transportation. 93. 

in wells, 68. 
use of, 73. 
Pipe line, advantages of, 95- 
96. 
companies, 185. 
cost of, 95. 

effect of, on industry, 95- 
97. 
on location of refineries, 
192-103. 
first attempts at, 88. 
growth of, 00-02. 
importance of, 02-93. 



Pipe line, in foreign coun- 
tries, 98. 
operation of, 94. 
riot over, 89. 

Standard control of, 184- 
188. 
Pithole City, Pa., boom at, 
55 57. 
speculative investments at . 
172. 
Pits, legends of, in Pennsyl- 
vania, 33 3 1. 
Pressure, in oil wells. 17 19. 

Production of oil. early.."):; 57. 

increase of, 158. 

methods of, 62-81. 

risks involved in, 81 . 
Pump. U>v pipe lines, 94. 

for wells, 7'.' 81. 
Pumping stations, 93 95. 
Pure ( hi Company, 188. 

Purification, need for proo 

3 of, 1 19 121. 

Pack, loading, for tank can, 

103. 
Railroads, oil shipments by, 
87. 
rebates on, 183 184. 
Rangoon oil, 28, 218. 

Rebates, <>n rail shipment-. 

183 is I. 
trials for accepting, 1 S ' 
Refineries, combination of, 

early, 180. 
description of, 110-111, 
130-131. 



268 



INDEX 



Refineries, independent, 178- 
179. 

location of standard, 193. 

shifting location of, 9.5. 
Refining, early, 107-108. 

essential steps in, 109-110. 

Kier's attempts at, 109. 

magnitude of, 173. 

products of, 125. 
Rockefeller, John D.,180, 200. 
Rogers, H. H., 209. 
Romans, petroleum used by, 

24-25. 
Rothschilds, at Baku, 210. 
Roumania, industry of, 220- 

221. 
Royal Dutch Company, 241. 
Russia, future oil supplies in, 
253-254. 

oil industry of. See Baku 

Saghalien, oil fields in, 254. 
St. Quirinus oil, 26. 
Salt wells, oil in, 37. 
Seneca oil, 35-36. 
Separating box, 112. 
Shell Transport & Trading 
Company, 241. 

use of fuel oil by, 144. 
Shipment of oil, in cases, 
early, 82-84. 

in bulk, 85-104. 
Shooting, object of, 77-79. 
Siberia, oil fields in, 254. 
Sicilian oil, 25. 

Silliman, Prof. Benjamin, 43. 
Skimming oil, 62-63. 



Smith, "Uncle Billy," 46. 
Societate Romana Americana, 

240. 
South America, oil fields in, 

258. 
Speculation, disaster follow- 
ing, 59. 
wave of, 56-58. 
Spindle Top, boom at, 168- 
169. 
history of, 249-250. 
Standard Oil Company, ac- 
tivities of, domestic, 
178, 183. 
foreign, 236-240. 
advantages of, 197-199. 
branches of, domestic, 178. 

foreign, 240. 
capacity of, early, 181. 
capitalization of, 199. 
competitors of, domestic, 
179. 
foreign, 241-243. 
economies of, 183. 
expansion of, 181-1SS. 
foreign trade of, 227-236. 
leading men in, 200. 
legal actions against, 189. 
magnitude of operations by, 

178. 
organization of, 177-178. 
origin of, 181. 
pipe line control by, 185- 

188. 
policy of, 189-190. 
production of oil by, 194- 
196. 
269 



INDEX 



Standard Oil Company, prof- 
its of, 199. 
refineries of, 103. 
resources of, example of, 

190, 196. 
subsidiary operations of, 

192. 
transportation interests of, 

190-191. 
weapons of, in competition, 
183 184. 
Steele, John W.. 201-202. 
Still, 110. 
Stillhouse, 112. 
Stillman, 112. 

Storage, methods of. 07. 

tanks used for, 97 
Stoves, oil burning, 1 L0. 
Sulphur, removal of, 1 19. 
Summerland, wells in ocean 

at. 167. 
Sunlight Xmi-Kx p 1 <> - i ve 
Burning Fluid, recipe 
for, 134 



Tank stations. 10 1. 
Tank steamers, early u 
100. -JO!). 

perfection of. 101-102. 
Tar process, 1 15-1 16. 
Tar, products from. 155. 
Tests, 126-130. 
Texas, first developments in, 
107. 
great boom in, 167-169. 
decline of, 172. 250. 



Tidewater Pipe Line Com- 
pany, 01. 
foundation of. Is7. 
war of, with Standard < hi 
interests, 187 188. 
Tools, description of drilling, 

69-72. 
Trade, domestic, 103-104, 
foreign, coming struggle in, 
2 1:;. 
early growth of, 22 1 -225. 
expansion <>t\ 233, 238. 
Standard Oil in, 228 231. 
transportation in. 229- 

230. 
wide range of, 230. 
Transportation, improvement 
«»f. 82 106. 

United Pipe Line Company, 

Is:,. 
United States, rank in oil 
production. 222. 
supplies of oil in. 256. 

United State- Pipe Line Com- 
pany, 188. 

Van Syckle, Samuel, first pipe 
line by, 88. 

Vaseline, nature of. 15 
uses of. 1.") 1. 

Venezuela, petroleum in. 258. 

Vessels, tank, early. 00. 

importance of. 101. 

steamers. 100. 
Volga River, oil trade 4 on, 
208-209. 
70 






INDEX 



Wagons, tank, oil deliveries 

by, 103-104. 
"Watsons Flats," 43. 
Watts, The Elizabeth, char- 
ter of, for first foreign 
cargo, 224. 
Wax slop, 118. 
WelLs, artesian, 65. 
cost of, 72-73. 
decline of yield from, 246, 

248, 251-252. 
depth of, 74-75. 
divisions of, 73-75. 
drilling of, 68-74. 
dry, increasing percentage 

of, 250. 
dug, in Burma, 64. 
in Japan, 63. 



Wells, first drilled, 38. 
flowing, cause of, 17-19. 
magnitude of, 76, 214. 
in ocean, 167. 
length of life of, 240. 
location of, methods of, 65— 

67. 
number of producing, 158. 
pumping of oil from, 79-80. 
shooting, 77-78. 
wildcat, 10-11, 66. 
yield of, 75-76. 
West Virginia, early develop- 
ments in, 161. 
oil fields of, 163. 
Wright, Peter, & Sons, foreign 

shipments by, 224. 
Wyoming, oil fields in, 256. 



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